After a sleepy year, the hotel industry in Vancouver and Whistler is about to get a blaring wakeup call. From February 12 to 28, the 2010 Winter Olympics are expected to draw 250,000 spectators, plus top athletes, foreign dignitaries and international media. Hotels in Vancouver are now sold-out for sixteen consecutive nights in a month they’re usually screaming for business.
Have you ever sensed an adversarial, “us vs. them” mentality from employees of service organizations? Perhaps you were on the receiving end of what you would describe as rude or abusive behavior? Or perhaps it was more subtle—like dismissive body language or an exasperated sigh? Maybe it did not even involve you and was just something you overheard or observed?
Our Retail world was pretty well whacked in the last two years, and 2010 will be a year of rebuilding our Brands with a new Value Proposition. The most serious question we all must ask is what does our Customer want? We have learned that Greed is not good, resources are limited and the consumer is resilient yet wary. Definitely, it will not be business as usual.
Did you catch the revised forecast from PKF? PKF-HR is now forecasting lodging demand to post a quarterly year-over-year increase during the first quarter of 2010, thus ending eight consecutive quarters of declines. On an annual basis, PKF-HR is now forecasting lodging demand to rise 1.9 percent in 2010, up from the 1.6 percent increase forecast back in September. (HotelNewsNow, 12/14/09)
For hotels in the upper-tier chain scale categories, government travelers have historically been viewed as “guests of last resort.” While government business is abundant, the per diem room rates set by federal, state, and local agencies are generally viewed as low. In addition, ancillary expenditures for food, beverage, retail, and recreation are restricted by government limits that are typically less than the average business traveler’s budget.
I recently shared the stage in Las Vegas at the annual Hotel Electronic Distribution Association Conference (HEDNA), with four travel industry marketing and distribution experts as a moderator for a Panel with the topic, "Economy in Transition" and what that means to the hospitality industry. " As we bring 2009 to a close, thankful to have survived one of the toughest economic downturns, we examined the lessons learned and top takeaways as the industry moves forward in 2010.
An impressive array of industry leaders gathered at the annual PhoCusWright Travel Technology Conference in Orlando, Florida, from 16-19 November for a show literally like no other. With several hundred thousand dollars of audio visual overload, I found myself feeling more like a reality TV star than an attendee at a typical conference. Among the throngs of market analysts, pundits, tech suppliers and potential clients, one longtime guest observed, “At this show, if it’s worth doing, it’s worth overdoing.”
The guest experience isn’t what it used to be at the Wyndham Austin Garden Hotel in Austin, Texas. Individual copies of USA Today are no longer delivered to each door, high-end water bottles have been replaced by less expensive brands from Sam’s Club, and complimentary bathrobes no longer hang in every guestroom closest. Such cutbacks to once-standard amenities abound at the property, underlining perhaps the biggest change of all: improved guest satisfaction. Call it doing more with less. Amid a historic industry downturn that has cut revenues to the bone, hotels are trimming operating expenses to follow suit, refocusing on those parts of a hotel stay that matter most to guests.
Meeting planners are faced with the same economic challenges confronting hotels today - - booking “effective” events at the least possible costs - - and as a result are “flexing” their negotiating leverage and aggressively seeking room rate concessions, according to a recent meeting planner survey conducted by PKF Hospitality Research and Conventions South Magazine.
When managing a hotel in a down economy, you can only make so many cuts to your operating expenses. And while most line items are fair game, there’s one area in particular that stands as an exception: sales and marketing. Maintaining a strong sales front is more important than ever before—a necessity whether hanging on to your existing customer base or attempting to gain market share, according to panelists earlier this month at Perkins Coie’s Navigating Troubled Times in the Hotel Industry conference at the Fairmont Chicago.
During this industry downturn, we all know that we have to contain costs and drive efficiency at the property level. Experienced operators have learned from previous slumps that avoiding certain temptations will help your performance versus your competitive set now and help set you up for success when the economy improves. While these may seem like basic measures, too many operators forget these five simple things that you should not do.
First, it's an old story, but stop thinking that lowering your rates will sell more rooms and increase room revenue. It may sell a few more rooms, but it rarely sells enough rooms to offset revenue lost due to lowered rates. It’s simple economics; lower rates have not ever, nor, will ever, create room demand. Travelers do not buy rate; they buy value. Don't reduce rates, add value.
It’s no secret that the hospitality industry has faced unprecedented challenges in recent months. A just-released year-to-year comparative report by Smith Travel Research (STR) cited the following statistics: Hotel occupancy was down six percent to end the week at 52.6 percent. Average daily rate (ADR) dropped 9.9 percent to finish the week at $95.86. Revenue per available room (RevPAR) decreased 15.7 percent to finish at $50.47. Furthermore, a recent Maritz telephone survey of 1,000 Americans indicated holiday travel is projected to experience its first significant decline in a decade, accounting for a reduction of $4.05 billion of travel revenue. The decline was attributed to a combination of financial concerns and fears surrounding the H1N1 virus.
Like a gladiator returning from combat, the U.S. hotel industry has come face-to-face with a number of considerable challenges this year: dismal demand, plunging rates and lack of financing to name a few. Yet while murmurs of recovery have begun to echo from the masses, the fight is far from over. Jim Abrahamson, president of the Americas for InterContinental Hotels Group, made this clear when discussing debt, which he called the “single most significant crisis that’s going to face us this year” during a panel at the AH&LA’s Hospitality Leadership Forum this week in New York.
After any natural disaster, it’s important to check in with affected parties to survey the damage. The same is true for an industry battered under a deluge of economic recession. During the Hospitality Leadership Forum held Saturday at New York’s Javits Center, moderator John Russell of NYLO Hotels asked for status reports from leaders of three major hotel companies during a CEO leadership panel. Their answers were heavy on challenges, but showed a resiliency and optimism that reflect the green shoots that have begun to sprout up throughout the industry
Over the past 18 months, one of the many casualties of cost cutting, downsizing, and elimination in the hotel industry, has been the commitment to comprehensive, strategic, creative, and proactive public relations communication. Much of the public relations activity in recent months has been reactive or related to dealing with the many perils and fallout of a struggling industry. Reduced travel, spiraling rates, image adjustments tied to consumer perception anxiety, crisis management with defaults, receivership, and trying to stay one step ahead of the next wave of bad news.
The Choice Hotels-Expedia brouhaha of recent weeks has shined a scorching spotlight on the fickle relationship between hotel companies and online travel agencies. Call it the industry’s version of a celebrity breakup scandal. But while the focus of debate has centered on last-room availability and other contractual terms surrounding room bookings, there’s a fundamental component of this precarious affiliation that’s gone largely ignored: visibility.
Establishing the value of a hotel in today’s economy is a little like playing darts blindfolded at the local pub—you know the general direction to throw but no one is certain exactly where the dart will stick. Speakers at last week’s ninth annual Fishing for Solutions: Servicing Hotel Loans conference in suburban Dallas reached a general consensus that it’s good to be skeptical if anyone tries to put an absolute value on a hotel. The hip term is “price discovery”—but speakers agreed no matter what it’s called, it must be determined before a significant recovery can occur.
My last two columns have addressed the evaluation and measuring performance process for hotel staff and I appreciate reader comments, questions and the opportunity to support hospitality and hotel companies. Those reader questions and inquiries caused me to reflect on the need to complete or “close” the circle of evaluation, which is providing useful and meaningful feedback to senior management.
In 2007, a traveler wrote the following review of Opus Hotel Vancouver on TripAdvisor: “The GM who thought he was Ian Fleming was a real detriment to a great trip. Shame -- let’s hope the hotel sees sense and releases Daniel to make another movie.” Ouch. The comment was a reference to my James Bond namesake and my secondary career as a mystery novelist, but nonetheless I was baffled by it, having no recollection of any guest encounter that would have provoked a public cry for my dismissal.