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Group pricing power momentum takes a step back By Patrick Mayock www.HotelNewsNow.com

Pricing power in the United States for hotel meeting planners negotiating group events took a step back during the first quarter of 2011, despite more commitments on the books.

The hiccup reverses a trend of growing optimism seen throughout 2010, according to Wells Fargo Securities' Meeting/Event Planner Survey.

"The proportion of hotel-based planners who felt hotels have negotiating leverage for dates in 2011 was 28%, down from 36% in our October 2010 survey. Similarly, the proportion citing 2012 fell to 58% from an astounding 94% in our last survey," according to the report.

The company collected responses from nearly 400 event planners at hotels, corporations, government offices and convention bureaus to assess the outlook for group demand.

"There's still plenty of availability around the non-premium dates around the calendar, so we don't have enough demand to lift the price," said Barry Goldstein, chief revenue officer for Dolce Hotels and Resorts.

The Rockleigh, New Jersey-based hotel operator is running nearly 20% ahead of last year in terms of group bookings, but rates across the 27-property portfolio are still US$15 below 2008 peaks on average.

"The good news is we're seeing the pace and demand come back. However, we're not necessarily seeing rate grow," Goldstein said.

Marriott International received weaker-than-expected group bookings during February—an interruption in the long-term hotel recovery—especially in the major markets of New York, Washington, D.C., Philadelphia and Atlanta, according to an analyst note from Nomura Securities International.

And Wyndham Hotel Group's Ross Hosking, executive VP of global sales, said the company's group bookings are pacing ahead of last year, though he failed to offer specifics.

Total group commitments for 2011 in the U.S. are up 6.8% year-over-year, according to Rubicon's North American Hospitality Review released in late February.

The laggard effect
Group room rates recover more slowly than transient room rates because they're negotiated so far in advance, said Jan Freitag, VP of global development at STR, HotelNewsNow.com's parent company.

An analysis of total U.S. transient versus group rate growth (based on a 12-month moving average) showed group average daily rate growth lags transient ADR growth anywhere from 18 to 25 months. In other words, when transient ADR hits US$100, group ADR doesn't hit that same benchmark for approximately two years.



For hoteliers to regain group pricing power, they must continue to push transient room rates to help accelerate the follow-up growth in group rates.

"Transient rate premium needs to continue to grow and go back to a normalized way of the world," Dolce's Goldstein said. "Group and transient (rates) have collided together. We need transient to continue to perform."

Fortunately, the U.S. hotel industry is moving in the right direction—albeit slowly.

For the first two months of the year, group ADR was US$101, according to STR. That's slightly above 2010's tally of US$100 during the same period, but still well below the 2008 peak at US$107.

Group demand has recovered more quickly. For the first two months of 2011, the U.S. hotel industry sold approximately 47 million group roomnights compared to 2010's 43 million group roomnights. The 2008 peak was 53 million group roomnights.

A rocky rebound
The step back in meeting planner confidence exhibited in Wells Fargo's survey findings might be more of a result of the geopolitical and macroeconomic landscape than of actual hotel performance, Freitag said.

"We're now at a point where the macroeconomic picture and the geopolitical picture is extremely unstable," he said. "People are saying, 'Well maybe this dip up, this increase in demand numbers is short-lived because of all the uncertainly about oil prices, (the disaster in Japan and conflict in the Middle East).' … People are a little more bearish and … therefore group demand and group rates are not as robust as we had thought at ALIS."

They still are improving, however.

"Group rates are beginning to recover as demand for group meetings has increased in the last six months," Wyndham's Hosking said.

Said Goldstein: "Group occupancy and demand is starting to come back … albeit slightly—very, very slightly."

"Patrick Mayock is the features editor at HotelNewsNow.com, an online news resource for the global hotel industry. He can be reached at patrick@hotelnewsnow.com.

This article originally appeared on HotelNewsNow.com. Its copyright holder has granted the HSMAI Greater Los Angeles Chapter a one-time, non-exclusive right for distribution in this newsletter. Further use, such as reproduction, distribution and display, is prohibited without the express written consent of its author."

Article Source - HotelNewsNow

SOCIAL MEDIA

Don't Judge an Expert by the Number of His Facebook Friends by Jacquelynn Mendez www.e-marketingassociates.com (626) 444-9111

"Social Media Intern Wanted: Must have at least 1,000+ Facebook friends to be considered."

Does this qualifying criterion look familiar to you? Because I've seen it far too many times to count. In today's Facebook friendly world, it seems like every business is looking for social media interns to help them leverage this underutilized resource, but without proper knowledge, it's easy to mistake a rookie for an expert. This is why I am here to advise businesses to stop using an individual's number of Facebook friends as criteria when looking for social savvy interns. Although there are exceptions, a large majority of Facebook friend frenzied users can usually fall into one of three categories: overly friendly, socially popular or Facebook stalker… all of which don't add up to, "Social savvy!"

Business vs. Personal
In the world of social networking, what works on a personal level does not always work on a business level, which is why it's important to look past the profile page and into the knowledge behind the numbers. There are plenty of people that have the potential and ability to help your business build the social presence it needs, but you will not find them by just checking candidates' friends, followers and fans. These are all numbers that can easily be faked using robots, money or spam. Instead, you want to check criteria that counts, including quality content, fan feedback and business level knowledge. Of course, this is all said with the assumption that you are not hiring an intern to head your entire department.

I understand that for many business owners, managers and HR directors, social media feels like a foreign subject, but that doesn't mean it's a job that can be handled by anyone with a profile page. That said, the last thing any business should do is blindly leave its social reputation in the hands of an intern. Remember, most individuals seeking out intern positions are usually doing so with the hopes of gaining real world experience and growing in the field. So as a word of advice, if you are hiring an intern, there should at least be a manager, consultant or director with working knowledge of social media to guide your team into the right direction.

So the next time you're searching for a social media intern, be sure to look past the friends, and dig a little deeper into the skills, knowledge and potential behind the profile.

To Learn More
To learn more about how social media can help your hotel build awareness and expand its reach, contact E-Marketing Associates at (626) 444-9111