In an article we published in February 2021, before the COVID-19 vaccines were broadly rolled out, we suggested to owners of hotels in Florida, and waterfront hotels in the Sunshine State in particular, that their assets would soon be in high demand.
The reason we qualify a reservation as a "group booking" is because the number of rooms booked requires special booking conditions to be applied by the Hotel, to prevent the risk of incurring massive revenue and profit loss for late cancellations of the bulk of rooms that cannot be replaced to the last minute.
U.S. Gross Domestic Product and hotel demand are strongly correlated. Based on data from 1990 through 2019, changes in demand for hotel rooms year over year have mirrored changes in the GDP, a consistent trend over the past 30 years.
Hard Rock International (HRI) on Friday received regulatory approval from the Nevada Gaming Commission for its acquisition of The Mirage Hotel & Casino from MGM Resorts International. HRI assumed operations control of the property as of 6 a.m. Monday, December 19. Under terms of the transaction, HRI paid $1.075 billion in cash for the operating assets of The Mirage Hotel & Casino. HRI entered into a long-term lease agreement with VICI Properties Inc. for the real estate property of The Mirage.
MGM Resorts International (NYSE: MGM) ("MGM Resorts" or the "Company") today announced it has closed on the sale of the operations of The Mirage Hotel & Casino ("The Mirage") to Hard Rock International ("Hard Rock") for $1.075 billion in cash.
As the Federal Reserve is expected to hike interest rates again next week in its attempt to curb high inflation, billionaire real estate investor Barry Sternlicht says the U.S. central bank has missed the mark.
Klaus Kohlmayr, Chief Evangelist & Development Officer @ IDeaS estimates that a typical hotel has to make roughly five million pricing decisions every year and that it is not humanly possible for any revenue manager to get every decision right, every day, without the support of an automated system like a Revenue Management System (RMS). Yet, less than 10% of independent hotels have an RMS in place.
In the next five years, the world will have increased its data from 36 Zettabytes to 163 Zettabytes. How much data is that? If a byte were the size of a grain of rice, 163 zettabytes would fill 163 Pacific Oceans! That's a massive amount of data. The hotel industry is not immune to that deluge, and revenue managers everywhere are faced with the challenge of dealing with it. Here are three recommendations:
In economics, one of the most well-known concepts is the Law of diminishing returns. What the law states is: As an investment in a particular area increases, the rate of profit from that investment, after a certain point, will decrease. Translated in Data analysis, one does not need to have 100% of the information to make the right decision.
More than ever data is available to help shed light in dark corners and to support making high impact decisions. When all goes well revenue managers will feel armed with the right data to check assumptions, gather insights and align teams towards profitable outcomes. With the quantity (and quality) of data sources increasing it can get daunting though.
Tipping from data-driven decision-making into analysis paralysis is common, but not unavoidable. As Scott’s original post says, having a strong filter on what NOT to analyse is important. Here are some other lessons we’ve learned in helping hoteliers navigate the world of data and insights.
The purpose of gathering and analyzing information is to produce a strategic course of action which changes or improves our desired outcome. Our goal is to reduce the time between data gathering and formulating and implementing actionable outcomes, or what I refer to as analytics efficiency.
How do you avoid the fine line between data-driven decision making and analysis paralysis? Don't ask humans to make that decision. Rely on ML algorithms that have developed to the point that allows us to answer this question intelligently and objectively.
The purpose of gathering and analyzing information is to produce a strategic course of action which changes or improves our desired outcome. Our goal is to reduce the time between data gathering and formulating and implementing actionable outcomes, or what I refer to as analytics efficiency.
There is no fine line. There is just misconception. We have been drilled as an industry to see data analytics as this art that we are too "dumb" to understand as a user. Therefore the industry was driven by BI and Revenue vendors with even bigger dashboards, even more details "because without it you cannot live".
Spirides Hotel Finance Company has successfully provided, and the borrower has officially closed $14 million in construction-to-permanent mortgage financing from a Midwest U.S. headquartered bank to finance the development of a lodging facility in Dunedin, Florida for players of the Toronto Blue Jays Baseball Club, a Major League Baseball franchisee. Florida is well known for its multiple professional baseball Spring training facilities. After building in Dunedin their “second home,” a 65-acre, $100 million Player Development Complex training facility that includes a 115,000 square-foot multipurpose building, the Toronto Blue Jays Baseball Club had been searching for nearby consolidated quality housing for their major and minor league players to use as they rotate through for training when City of Dunedin officials introduced Toronto Blue Jays officials to Doug Anderson, an experienced Dunedin-based developer and general contractor who promptly orchestrated a deal to build the hotel and rent large blocks of rooms to the Blue Jays for the greater part of each year going forward.
CBRE Hotels Research specializes in translating national and local economic conditions into measures of hospitality market and property-level financial performance now and into the future.
Rockbridge is pleased to announce it has completed the final closing of its most recent value-add flagship fund, Rockbridge Hospitality Fund VIII L.P. ("Fund VIII") at $431 million of investor commitments, surpassing its target of $425 million. Fund VIII was backed by both long-standing investors and select new investors, including pension funds, foundations, endowments, insurance companies, asset managers, and private capital from family offices and high net worth investors.
A positive Guest experience is driving and maximizing revenue. Without it you are punching above your weight and possibly get knocked out faster than you can imagine. We will only know if our price is right once the customer sits back at home reflecting on the experience they had.
Today's typical online travel consumer - your past, current and future hotel guest - is exposed to more than 250,000 digital micro-moments a year: from social media interactions to messaging and quick read of the headlines on their smartphones (Google Research).
The evolution of Revenue Strategy as science more than art has certainly created further division between the needs of our owners and the needs of our customers. However, at the heart of each hotel strategy is the Long Term Value (LTV) of a customer which we now need to protect and defend at all costs.
Spirides Hotel Finance Company has just successfully provided, and the borrower has officially closed a $6.3 million mortgage loan from a southeast U.S. headquartered bank to refinance the existing mortgage debt plus take $1.5 million cash out of the Holiday Inn Express in Latta, South Carolina. The $1.5 million cash taken out of the loan proceeds will be used by the borrower as an owner’s cash equity down payment to build another hotel in North Carolina where they already own the land.
Prices rose by 8.2% annually in September, up 0.4% from August. A 2.1% drop in energy prices was offset by broad-based price increases, particularly for housing, food and health care. Core inflation, which excludes volatile food and energy prices, increased 6.6% from a year ago and 0.6% from August. With core inflation remaining well above its 2% target, the Fed will continue aggressively tightening monetary policy. A 75-bp increase in interest rates is expected in November, followed by another significant increase in December.
Annual changes in U.S. hotel utility costs and in the Consumer Price Index (CPI), or inflation, have historically proven to be strongly correlated. As of August 2022, CBRE is forecasting CPI growth to be 7.7 percent in 2022, followed by another 3.6 percent in 2023. Since inflation has averaged just 2.2 percent since 2000, these inflation projections have hoteliers concerned about operating costs. Given that rising energy costs are a significant driver of the current rise in CPI, hotel managers are especially worried about utility department expenses.