Industry News ~ Snapshot

Smith Travel Research Weekly Lodging Report
A snapshot of conditions in the U.S. lodging market from leading industry forecasters Smith Travel Research. These 28-day moving average figures graph occupancy, average daily rate, and revenue per available room (RevPAR). These figures are excerpted from the STR Lodging Review. Subscriptions to this unique reference tool are available from STR at www.str-online.com. Click HERE to access this week's report.
> Top

War Takes Toll On International Business Air Travel
The Iraq war is taking a greater toll on international business air travel than domestic air travel, according to the Business Travel Coalition, a group representing U.S. air travel buyers. Twenty-one percent of corporations surveyed have banned international travel for the time being, and another 33 percent said they would consider banning international travel if the war drags on, according to the BTC. In contrast to their views on international travel, companies are less strict when it comes to domestic air travel, the survey found. Two-thirds of respondents have communicated to employees that management is not pressuring them to travel during the hostilities, and nearly half the companies have adjusted their domestic travel policies to reflect a perceived increased threat as a result of war. Typical comments from those whose companies have adjusted their domestic travel policies indicate that corporations are encouraging their employees to defer non-essential travel and are referring travel approval to senior managers. The BTC surveyed 123 large buyers of U.S. commercial air transportation on March 19, just at the onset of war.
> Top

However, Most Business Travelers To Take Planned Trips
Less than one in ten (9%) business travelers have cancelled a trip because of the war in Iraq. As expected, the majority (64%) of cancellations were for trips by air. Less than one out of every five cancellations was for a trip by car (18%). Approximately four out of ten (39%) respondents indicated that they had cancelled an international trip. Nearly three out of every four (72%) business travelers said the war will not influence their future business travel plans. Among those who indicated their plans would change (29%), six out of ten (63%) said they would take fewer international trips and a similar percentage (60%) said they would not travel to specific destinations.
> Top

Survey Finds Many Americans Still Traveling
The U.S. war with Iraq has created a great deal of uncertainty for those who have travel plans. A recent survey however finds encouraging news. When asked whether the war will cause them to change their travel plans, a resounding 76% of respondents said no, they are not changing their plans and are continuing on their trip. The online survey of 896 people was conducted by Fodor's Travel from March 19-22. Interestingly, Americans' sentiments about travel are similar to those prior to the start of military actions. In a separate Fodor's survey conducted during the week of March 10, before the war began, the question posed was if the fear of war against Iraq made them change their travel plans. The responses were nearly identical to those of the recent survey.
> Top

War Creates New Challenges For Convention Centers
Re-evaluating contracts and license agreements, reviewing security concerns and planning to combat the adverse impact of the War in Iraq on the economy and business travel are creating new challenges for convention centers. The lessons of the post 9/11 period may be of limited value in evaluating the impacts of the current Iraqi war on the global meetings industry, says AIPC President Barbara Maple. "The events of 9/11 were a surprise - so everyone had to evaluate and respond without any real experience to go on", says Maple. "Since then, we've experienced many different impacts, but have learned to live with most of them. Among these are delays in decision- making and contracting, changes in client relationships brought on by staff turnover and increasing expectations regarding security and access. The general feeling in the industry is that many of these changes were due to economic conditions and lingering transportation problems as much as anything related to political turmoil."
> Top

Priceline.com Expects Surge In Last Minute Bookings
Priceline.com, which is also frequented by last-minute travelers, is also watching for a possible surge in customers who are wary of making long-term vacation plans, according to a company spokesman, Brian Ek. But any gains from last-minute travel will not offset the sagging demand among conventional travelers, analysts say.
> Top

Merchant Model For Online Airline Ticket Sales
Internet travel sites have in recent years been diversifying their revenues by taking blocks of airline seats at a wholesale price, marking them up and booking the difference as profit, rather than simply collecting the agency commission. This increasing reliance on the so-called merchant model will not complicate matters for Web sites during a period of low sales because the online travel agencies do not actually own the inventory.
> Top

Moody's Looks At Impact On Airlines
The war’s impact on the airlines has preceded its outbreak, due to higher fuel prices and a drop in demand, the latter of which has also had an impact on lodging-related ratings, according to Moody’s. “While at the end of the day, the conflict in Iraq may be the proximate cause of failure of one or more airlines, absent a prolonged conflict, it is not the primary factor determining their fate,” said Moody’s Vice President and Senior Credit Officer – Airlines, Richard Bittenbender. “That is a result of losses due to the combination of high costs and a collapse in yields driven by overcapacity.”
> Top

National Events & News

   • St. Louis - Sept. 9, 2003 ~ Millennium Hotel
   • Boston - Sept. 30, 2003 ~ Sheraton Boston
   • Atlanta - Oct. 7, 2003 ~ Hyatt Regency
   • Chicago - Oct. 30, 2003 ~ Holiday Inn O'Hare
   • Minneapolis - Oct. 23, 2003 ~ Millennium Hotel
   • Dallas - Nov. 6, 2003 ~ Hotel InterContinental
   • Washington, DC - Nov. 25, 2003 ~ Hilton Washington & Towers
   • Anaheim - Dec. 11, 2003 ~ Paradise Pier

Contact: HSMAI Meetings Quest
c/o JTDunn Enterprises, 513 Commerce Drive, Upper Marlboro, MD 20774
(301) 249-4600, Email: meetingsquest@jtdunninc.com; www.meetingsquest.com

> Top

Selling Tips Is Price Really The Issue? by Kevin Nunley www.drnunley.com (888) 429-6203

Most people think the most important determining factor in a sale is the price. But recent studies show that consumers ranked price no higher than 9th and, on average, 13th in its level of importance.

So if the lowest price isn’t what your customers are looking for, what do they really want? Well, first of all, many people won’t buy the lowest priced item because they’ve had bad experiences with "cheapies" in the past. People tend to relate inexpensive with "will break easily," or "will cause me aggravation." Apparently, buyers are more interested in the value of a product than they are in the price.

The real determining factor in a sale is the "total cost" of an item. That is what determines real value. Total cost is not just price, but what you’ll actually get for the price. If you have the choice of paying $50 for a product that will not work properly, or $200 for one that will do exactly what you want, the more expensive product is the one with the preferable total cost.

One effective strategy for pushing total cost over simple monetary cost is to ask your customers questions like, "What will this be worth to you?" and, "How important is this to you?" These questions prompt your potential customers to really think about the total cost and the value.

So before you mark your products as the lowest priced around, think about what the real value is to your customers.

> Top