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Industry
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Snapshot
ECONOMIC
INSIGHTS:
POSITIVE ECONOMIC
TRENDS SEEN FUELING BUSINESS TRAVEL UPTURN
Business travel appears headed for a rebound later this
year and into 2005 as the economy continues to improve
and international tensions abate, according to a new
survey of business travel management professionals conducted
by the National
Business Travel Association (NBTA). Nearly three
in four (71%) of the business travel managers participating
in the survey believe that business travel will rebound
significantly in 2004 and into 2005, with more than
half (54%) predicting the recovery to occur sometime
this year. The survey suggests a consensus among business
travel managers that the recovering U.S. economy will
promote more business-related travel. --e-hotelier.com
HOTEL
HIGHLIGHTS:
INDUSTRY ANALYSTS
DIFFER ON EXPECTATIONS OF DEMAND, REVPAR
PricewaterhouseCoopers
believes a healthy combination of rising demand, relative
low supply growth and incremental increases in room
rates will spark an upturn in RevPAR of more than five
percent. That boost is significant given the history
of plunging RevPARs in 2001 and 2002 and breakeven numbers
last year. PKF Consulting's Hospitality Research Group
is similarly bullish about the segment it covers most
closely: chain-affiliated hotels in major U.S. cities.
That group, says HRG, will see demand rise by more than
six percent, pushing occupancy up to nearly 65 percent.
Similarly, RevPAR will jump 7.6 percent. Merrill Lynch
analyst David Anders is one of the least optimistic
forecasters. He sees demand rising by 3.4 percent (versus
4.5 percent by PwC), rates increasing one percent (versus
nearly two percent by PwC) for a RevPAR improvement
of 3.2 percent. -- Lodging Hospitality
AH&LA SURVEY
SHOWS HOW HOTEL INDUSTRY IMPACTS ECONOMY
Hotel guests generated more than $1 billion in sales
last year and were responsible for maintaining some
13.1 million lodging jobs, according to the 2003 Impact
of Room Tax Increases on the Lodging Industry, a new
study released by the American Hotel & Lodging Educational
Fund, an arm of the American Hotel & Lodging
Association. The study found that the average hotel
room rate in 2003 was $86.26, while the average room
tax was 12.4% or $9.51 per night. -- Travel Weekly
CORNELL RESEARCH
UNCOVERS LOYALTY CONUNDRUM
Service companies may want to rethink the billions they
spend on customer-loyalty programs. A new
research report from Cornell graduate Iselin Skogland
and Cornell faculty member Judy Siguaw indicates that
brand switching sometimes occurs even among a hotel's
most satisfied guests, while some of the least satisfied
guests cannot be bothered to do the same. The report
analyzed behavior according to four distinct guest segments
-- satisfied switchers, dissatisfied switchers, satisfied
stayers, and dissatisfied stayers. Two groups, satisfied
stayers and dissatisfied switchers, generally behave
as one might expect, either staying or defecting based
on their level of satisfaction. The other two groups,
satisfied switchers and dissatisfied stayers, do not
conform to expectations. Most confounding are satisfied
switchers, who report being satisfied but then choose
alternative hotels, rather than routinely choosing the
hotel where they have had satisfactory experience. Thus,
although marketers have long held that guest satisfaction
is instrumental in ensuring repeat business, satisfaction
does not appear to drive repeat purchases for all consumers.
-- e-hotelier.com
AIR
TRAVEL TRENDS:
CONFIDENCE IN
AIR TRAVEL SAFETY IS GOOD NEWS FOR HOTELS
Increasing consumer confidence in the safety of air
travel is heralding good news for the traumatized lodging
sector, according to forecasters at the Americas Lodging
Investment Summit. Industry analysts report small but
significant increases in demand and occupancy levels
in America, Europe and the Asia-Pacific market. The
national hotel occupancy rate was 63.8% in 2003. That
will rise to 67% this year and to 68.4% in 2005, according
to Mark Woodworth, executive vice president of PKF Consulting.
Reports from the airline industry that the passenger
load in December had recovered to pre 9-11 levels "might
be the indicator that will move the industry ahead to
a much more robust economy," says Larry Shupnick,
senior vice president of development and acquisition
for AmeriStar Hospitality Corp. -- HotelsMag.com
INTERNATIONAL
INFO:
WTO SAYS TOURISM
GROWTH TO RESUME IN 2004
Battered by a series of problems, international tourism
arrivals fell 1.2 per cent in 2003, the biggest annual
drop ever to 694 million, some 8.5 million less than
in 2002. However, the outlook for this year is much
brighter, the World Tourism Organization (WTO) announced.
"In 2003, international tourism lived through another
exceptionally difficult year in which three negative
factors came together: the Iraq conflict, SARS and a
persistently weak economy," explained WTO Secretary-General
Mr. Francesco Frangialli. Although conditions improved
considerably as the year progressed, with positive figures
generally starting to return in the second half, the
recovery was not sufficient to result in growth for
all destinations. Despite a series of difficult years,
from 2001 to 2003, the number of international tourist
arrivals had still managed to show an overall increase
of seven million, equivalent to a rise of one per cent,
over the "millennium" year of 2000, he added.
Forecasts for this year are generally optimistic, based
essentially on positive signs of recovery in the economies
of the US, Japan and Western Europe and the moderation
in conflicts. The large pent-up demand for travel is
bound to express itself as soon as circumstances allow
according to the WTO -e-Hotelier.com.
NORTH AMERICA
LOSES GROUND THIRD YEAR IN ROW
The Americas also recorded a decrease (-1%), with North
America the only sub-region to record a loss (-5%) for
the third year in a row, mainly due to the weak economy
and continuing concerns about security after 11 September
(2001). The Caribbean (+8%) and South America (+12%)
rebounded strongly from the negative figures of the
previous two years, fueled by improved economies in
major countries such as Argentina and Brazil, which
helped to boost intra-regional travel.
BIZ/LEISURE
TRAVEL:
YPB&R TRAVEL
MONITOR FINDS BUSINESS TRAVELERS TIRED
We enter the New Year with the expectation that demand
for business travel services will increase as the economy
continues to improve and concerns about safety and security
begin to abate. But the prospect of hitting the road
once again is something many business travelers face
with growing trepidation. Some compelling evidence of
their less-than-sanguine view of business travel may
be found in our most recent National Business Travel
Monitor from Yesawich Pepperdine
Brown & Russell. The recent report indicated
that 51% of business travelers say they don't get enough
sleep on business trips; 33% eat too much; 32% say the
new airport security measures make business travel a
"big hassle;" 26% feel more stressed out;
23% get lonely; 8% drink too much. Further evidence
of the ambivalent feeling many business travelers have
about hitting the road is manifest in the following:
fully one third agree they would avoid airline travel
if they could accomplish their business without it.
- YPB&R Travel Monitor
BENCHMARK HOSPITALITY'S
MEETING INDUSTRY TRENDS FOR 2004
Benchmark Hospitality, which manages 27 award-winning
resorts, conference centers and hotels in the United
States, Canada and Japan, announced its annual "Meeting
Industry Trends" for the New Year, as observed
by its properties.
#1. Wireless
technology is everything and everywhere, from meeting
rooms to guestrooms to answering email at the pool.
#2. Meeting planners now routinely use the Internet
to research properties, learn about destinations,
email RFPs, book meetings and register for conferences.
#3. Short-term booking continues with meetings of
10 to 100 guests still booking from 30 to 90 days
out.
#4. Meeting length has decreased slightly for 2004
- averaging about 2 to 3 days, unless the meeting
is a national training program, which remains 4 to
5 days.
#5. Series-style meetings are staging a comeback,
albeit tentatively and in many cases with fewer programs
in the series.
#6. Health conscious meetings are growing with the
Atkins revolution is having a dramatic impact on morning
& afternoon refreshment breaks.
#7. Teambuilding is staging a comeback.
#8. There is a strong movement to end hidden costs.
#9. More fun is being incorporated into the meeting
program.
ONLINE
ISSUES:
INTERNET BLAMED
FOR DILUTING BRANDED HOTELS' RATES
According to PricewaterhouseCoopers` analysis, the Internet
generated an average of 26,000 incremental rooms occupied
per night and annual incremental room revenue of $715
million in 2003. This incremental gain was offset by
a $1.99 billion loss for the U.S. lodging industry as
a result of the Internet's lower pricing effects. The
net effect for the industry in 2003 will be a negative
$1.27 billion. Increased use of the Internet contributed
to a decline of the branded hotels` rate premium relative
to independent hotels. Average daily rates for branded
properties would have been $3.18 higher per occupied
room night in 2003 than if there were no Internet effect.
In 2003, approximately 12 percent of lodging reservations
were placed on the Internet, according to PhoCusWright
data. According to PricewaterhouseCoopers research approximately
15 percent of these reservations were directly generated
because of the Internet, as a result of advertising,
pricing and ease of use. - e-hotelier.com
EXPEDIA WORKS
ON DIRECT CONNECT PROGRAM FOR HOTELS
With direct connectivity, Expedia is making it easier
and more cost- effective for its hotel property owners
to manage the inventory and reservations provided to
the more than 12 million travelers shopping monthly
on Expedia.com. Bookings made by Expedia.com customers
for hotels in the Hyatt and Outrigger portfolios are
now automatically confirmed in the respective systems
of each hotel. Expedia expects to complete phase two
of the direct connect project shortly, enabling Hyatt
and Outrigger hoteliers to upload inventory and rates
directly from their property management systems into
Expedia's database. Expedia's initiative to link directly
with hoteliers' reservations systems is an advanced
and fast growing direct connect program. In the next
24 months, Expedia is planning to implement direct connectivity
at more than 10,000 hotel properties.
HSMAI LAUNCHES
ECONNECT
Debuting as a one-stop portal to global information
and resources on hospitality and travel sales and marketing
topics, HSMAI announces the launch of eConnect. The
first ever, all-encompassing, online source for information,
research, contacts and best practices, eConnect is an
HSMAI Foundation program hosted by the University of
Houston’s Conrad N. Hilton College. Created as
an online repository for information on and research
into today’s most important industry issues, the
site's resources are organized into six key subject
areas, the content of which is continuously added to
and updated.
New This Week, access to research on:
- Relationship
Marketing: The Challenge to Destinations
- Complaint Behavior
as a factor in Cruise Line Losses
- Diamonds in
the Data Mine
- On-Line Pricing:
An Analysis of Hotel-Company Practices
- Click
Here to go to eConnect, log in, and connect today.
HOSPITALITY
INFORMATION EXCHANGE CREATED BY CORNELL
Responding to requests from industry leaders, The Center
for Hospitality Research at Cornell University's School
of Hotel Administration has created an online information
exchange to help practitioners solve problems and discover
new practices. The discussion board provides an open
yet confidential forum in which industry professionals
can engage both their peers and Cornell Hotel School
faculty on operating issues ranging across the hospitality
industry. Cornell faculty members are active participants
in the exchange, responding directly to questions and
concerns. To access the discussion board, please visit:
www.hotelschool.cornell.edu/chr/bb.
-- Meetings Media.com
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