| Industry
News
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ECONOMIC INSIGHTS ---
PWC FORECASTS HOTEL ROOM RATES
TO HIT RECORD HIGHS
The average hotel room rate in the United States will
hit a record high this year of $89.97, PricewaterhouseCoopers
(PwC) predicted in its mid-year lodging forecast. At
a growth rate of 4.3 percent, this is the strongest
increase since 2000, when the rate was 5.4 percent.
Nationwide occupancy will reach 63.4 percent this year,
an increase of 3.3 percent over last year and the highest
occupancy rate since 1997, according to PwC's hospitality
practice, which also forecasts positive occupancy growth
through 2007. PwC forecasts that industry profits will
reach $20.8b this year, the highest level since 2000.
In 2006, profits are expected to reach a new record
high of almost $25b. RevPAR will increase 7.8 percent
this year over last year, according to PwC. Never before
has the industry experienced five consecutive years
of positive occupancy gains. The industry experienced
four consecutive years of growth during the period 1992
through 1995 and in the late 1970s and the last time
the industry experienced two consecutive years of strong
positive occupancy growth was in 1993 to 1994.
LUXURY SEGMENT EXPECTED TO
SHOW STRONGEST REVPAR
The luxury segment is forecast to experience the strongest
average RevPAR growth in the period 2004 through 2007,
at 9.9 percent, according to Pricewaterhouse Coopers.
In 2005, the segment's RevPAR is forecast to increase
by 11.3 percent, the highest growth rate since 1996.
The luxury segment's occupancy is forecast to reach
70.8 percent in 2005, the highest since 2000. The midscale
without food and beverage segment is expected to experience
the second highest average RevPAR growth rate during
the period 2004 to 2007 at 7.9 percent. The segment
is expected to reach occupancy of 66.8 percent in 2005,
the highest since 1996. RevPar is expected to increase
by 12.2 percent in 2005. -- Ehotelier.com
TIA REPORTS GROWTH IN INBOUND
TOURISM
After increasing 12 percent in 2004 overall, continued
growth is evident in visitation to the U.S. from the
five countries profiled by the Travel Industry Association
of America (TIA). Year-to-date 2005 data from the Office
of Travel and Tourism Industries (OTTI) show increases
ranging from 2.7 percent from Japan to 15.5 percent
from Brazil. Despite these increases, TIA said, the
U.S. is still well below 2000 worldwide marketshare
levels, and uneven economic performance around the world
is likely to affect future prospects for continued recovery
in international markets.
OPTIMISM ABOUNDS AT NYU CONFERENCE
Most hotel executives and investors expect healthy occupancy
and revenue levels to continue through 2007, according
to a survey of more than 170 hospitality executives,
investors and real estate professionals attending the
New York University 27th Annual International Hospitality
Industry Investment Conference held in New York in early
June. Optimism dominated the conference and survey results
reflected the extent of continued expectations: 54 percent
said the market will sustain occupancy and revenue levels
through 2007, and 20 percent expect the momentum to
continue through 2008. "The business customer has
come back," Carlson Hospitality Worldwide president
and CEO Curtis Nelson told conference attendees. Just
over half of survey respondents cited the business travel
rebound, while 27 percent cited pent-up demand as the
primary factors for a "faster than anticipated
recovery of the U.S. hotel industry back to 2000 levels."
- Business Travel News
TOURISM OFFICE BUDGETS REFLECT
POSITIVE OUTLOOK
The year ahead looks optimistic for the 47 state tourism
offices that responded to questionnaires for TIA's 2004-2005
Survey of U.S. State and Territory Office Budgets. The
collective projected budgets for fiscal year 2004-2005
total $602.7 million, 10.6 percent higher than last
year's actual budget. For the first time in years, the
average funding allocation for all budget breakdown
categories increased from the previous year. Combined
marketing and promotion-related budgets increased over
9 percent, advertising and sales promotion budgets increased
5.3 percent and the combined international advertising
and sales promotion budgets increased 27.8 percent.
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Here for more Industry Insights on HSMAI's
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HOTEL HIGHLIGHTS ---
REVENUE MANAGEMENT LEADERS MAKE
RECOMMENDATIONS AT CONFAB
Delegates at HSMAI Revenue Management Strategy
Conference called for the creation of a clear Revenue
Management culture noting that hospitality industry
pricing today is far too tactical and the challenges
of multi-channel distribution and other costs need to
be factored into the equation in order for companies
to be profitable. A total of 165 professionals from
leading organizations in hospitality and travel attended
the second annual HSMAI Revenue Management Strategy
Conference, June 20, 2005 in Los Angeles, held in conjunction
with the HITEC conference. There were 53 different hotel
and hotel companies represented and 63% of hotel attendees
were in corporate or regional positions for their company.
Organized by HSMAI's Revenue Management Advisory Board,
the conference discussed and debated critical issues
and offered viable solutions and strategies for this
very specific industry segment. Click Here for more
on this event.
BEDS, BEDS,
BEDS REPLACES LOCATION, LOCATION, LOCATION AS KEY
While the hospitality industry as a whole
reeled from the one-two punch of a recession and the
downturn in travel after 9/11, the "Heavenly"
franchise -- extended to include shower heads, bathrobes
and pet bedding -- was a cash cow, bringing in $4.3
million in 2003, a year when many hotels struggled to
break even. Now competing chains have caught on, engaging
the hotel business in an all-out war for upscale travel
dollars. Among the contenders are the Hyatt chain, which
has produced the Grand Bed; Radisson, with its Sleep
Number Bed; and the Marriott, which is rolling out an
unnamed luxury bedding package this year.
GIORGIO
ARMANI PLANNING NEW HOTEL CHAIN
Designer Giorgio Armani signed a $1b contract
with EMAAR Hotels & Resorts LLC for the development
of 10 Armani-designed, EMAAR-managed resorts over the
next 10 years in hotbed cities like Milan, London and
New York City. The first fruits of the collaboration
will be the 175-room Armani Hotel, expected to open
in Dubai by early 2008. - Meetings & Conventions
BLACKSTONE
TO ACQUIRE WYNDHAM INT'L
The Blackstone Group has entered into an agreement
to acquire Wyndham International at a cost of $3.24b.
Under the agreement approved by Wyndham's board of directors,
Blackstone will purchase all of Wyndham's outstanding
common stock at $1.15 per share. Wyndham International,
based in Dallas, owns, leases, manages and franchises
upscale and luxury hotel and resort properties in the
U.S., Canada, Mexico, the Caribbean and Europe. - Travel
Weekly
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Here for more Hotel Highlights on HSMAI's
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AIR TRAVEL TRENDS ---
INFLIGHT INTERNET TAKING OFF
INTERNATIONALLY
International carriers are introducing or
expanding inflight Internet access including Scandinavian
Airlines System, the latest airline to offer wireless
high-speed connections on long-haul flights. Others
that recently launched similar services include All
Nippon Airways, El Al and Japan Airlines, most of them
using Connexion by Boeing. Singapore Airlines launched
Singapore-London wireless service in March and other
carriers planning to provide the Connexion service include
Asiana, China Airlines and Korean Airlines. Lufthansa
German Airlines was one of the pioneers of the service
with FlyNet using Connexion. - Business Travel News
CHINA IS NOW LARGEST
China is now the largest airline market in
Asia after flying past Japan last year and second only
to the United States in terms of people flying out.
By 2007 China will replace the United States as the
largest originator of world tourists. Chinese aviation,
linked to the country's overall economic performance,
is booming and the growth is to continue. Factors such
as joining the World Trade Organization (WTO), the successful
bid for the 2008 Olympic Games in Beijing and the 2010
World Expo in Shanghai, will continue to fuel the economy.
Gross domestic product is forecast to increase at a
minimum of 8 percent per year over the next decade and
air travel by 10 percent. Last year, the number of countries
the Chinese can visit increased to 90; including Britain,
where the first tour party is set to arrive in July.
The British Economist Intelligence Unit says that in
2005 28.5m tourists will fly out of China.
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INTERNATIONAL INFO ---
PEGASUS SOLUTIONS OPENED FIRST
OFFICE IN CHINA
Pegasus is intent on expanding in the Asia-Pacific
region, with the Beijing office supplementing locations
in Singapore, Sydney and Tokyo. In conjunction with
the office opening, Pegasus named Olivier Dombey as
vice president of sales and account management for Asia-Pacific.
He formerly worked in various marketing positions at
Beijing Ou Yang Business Consulting. - Travel Weekly
CHINA EXPECTS TO GROW INTERNET
TRAVEL MARKET
China's travel market and Internet-based travel
consolidators will experience strong and steady growth
in the next few years, driven by increasing independent
travel and China's robust economic growth, Deutsche
Bank said. China's leading online travel consolidators,
Ctrip and eLong, currently hold two to three percent
of the travel market but are poised to capture the lion's
share of market growth. 'We believe that the leading
travel consolidators are well positioned to eventually
dominate the entire travel industry in China,' the brokerage
said in a research report. Ctrip, which Deutsche Bank
estimates holds 50 pct of the market for hotel bookings,
and rival eLong which holds 20-25 pct, will dominate
the market due to their control of hotel supply and
air ticket and hotel room demand as well as an industry-wide
move from tour-group travel to independent travel. -
Hotel Marketing.com
Click
Here for more International Info on HSMAI's
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BIZ/LEISURE TRAVEL ---
BUSINESS TRAVEL CONTINUES TO
BOOST DEMAND
In 2004, the business travel rebound boosted
overall lodging demand by approximately 110,000 average
daily rooms, according to PwC's analysis of Smith Travel
Research data, resulting in a 4.5 percent increase in
room demand. This year, the business travel rebound
will contribute 102,000 average daily rooms to total
U.S. demand. - Meeting News
LATEST TIA REPORT EXAMINES
LEISURE TRAVEL DECISIONS
With more travel choices than ever before,
how do travelers decide where to go and what to do?
Is price always the main concern when planning trips?
TIA's new research report, Leisure Travel Planning:
How Consumers Make Travel Decisions, examines the primary
influencers behind consumers' travel choices. Based
on the decision making and planning patterns of over
5,000 travelers, this report includes information about
how they come to their decisions about destinations,
transportation modes, brands and accommodations. Study
results are also segmented by four popular leisure trip
occasions: entertainment, family-centered, outdoor recreation
and combined business/pleasure.
BIZBASH.COM PARTNERS WITH GROOPLE
FOR GROUPS BOOKINGS
BizBash.com, a resource for meetings and event
planners, introduced online group-hotel bookings through
Groople. From the Group Travel tab on the BizBash home
page, users can research and book reservations for five
rooms and more, Groople said. Through Groople, BizBash
users have access to negotiated rates. Bookings are
accommodated online and over the phone. Groople also
handles group air, cruise, car and rail bookings over
the phone and intends to introduce online booking of
these products, as well. -- Travel Weekly
AMADEUS GDS ADDS GROUP BOOKING
TOOLS
Travel agents in the United States and Canada
can now book hotel room blocks for groups through the
Amadeus global distribution system. The new service
is the result of an agreement between Amadeus and Group
Travel Planet, whose database contains more than 10,000
hotels that offer group bookings. "By making it
as easy to book a group in a hotel as it is to book
an individual room, Amadeus agents and travelers will
benefit from the savings Group Travel Planet provides
in both time and money," Bob Lowry, senior vice
president of product management and support for Amadeus
North America, said about the new service. Travel agents
can access Group Travel Planet's hotel inventory through
web-based Amadeus AgentNet. Bookings made through Amadeus
are fully commissionable, the company said. -- Meeting
News
US #1 COUNTRY, BARCELONA #
1 CITY FOR ASSOCIATION MEETINGS
The U.S. still holds more international association
meetings than any other country, while Barcelona tops
the charts as the most popular city in 2004, according
to ICCA International Meetings Market Statistics 2004.
Germany and France both rose two places, respectively,
from fourth and sixth to second and fourth place. The
list of the top 10 countries for association meetings
rounds out like this: 1. USA; 2. Germany; 3. Spain;
4. France; 5. United Kingdom; 6. The Netherlands; 7.
Italy; 8. Australia; 9. Japan; 10. Austria. Newcomers
to the top 10 cities are Hong Kong, rising dramatically
from No. 18 to No. 5, and Paris, which rose from No.
12 to No. 7. The list of this year's top 10 world cities
for association meetings includes: 1. Barcelona; 2.
Vienna; 3. Singapore; 4. Berlin; 5. Hong Kong; 6. Copenhagen;
7. Paris; 8. Lisbon; 9. Stockholm and Budapest (tied)
- Meetings Net Extra
CONVENTION INDUSTRY COUNCIL
NAMES HALL OF LEADERS FOR 2006
Six meetings, conventions and exhibitions
industry pioneers will join 86 fellow leaders immortalized
in the Convention Industry Council's (CIC) Hall of Leaders.
The six individuals were selected from a group of extraordinary
nominees representing the most outstanding leaders and
innovators in the industry. The honorees will be inducted
at the 2006 Hall of Leaders Gala on August 20, 2006
in Boston, Massachusetts. The 2006 Hall of Leaders inductees
are: William "Bill" Boyd, CITE, CMP, CMM,
President/ CEO, Sunbelt Motivation and Travel; Robert
"Bob" Dallmeyer, President, R.D. International;
Virginia M. Lofft, Former Vice President/ Publishing
Director, Primedia Business, The Meetings Group Magazines;
J. Frank Poe, Director, City of Dallas Convention &
Event Services Department; Mickey Schaefer, CAE, President,
Mickey Schaefer & Associates, and Carl C. Thompson,
Executive Director, Society of Government Meeting Professionals.
HSMAI'S
AFFORDABLE MEETINGS® WEST PLANNER ATTENDANCE UP
8%; NATIONAL NEXT
Meeting planners and exhibitors came out in
full force to experience two days of face-to-face meetings,
business generating and learning at the 9th Annual HSMAI
Affordable Meetings West® show, held June 15-16,
2005 at the San Jose McEnery Convention Center, San
Jose, CA. Next year, the show will be held in Long Beach,
CA as part of its west coast rotation. This year's show
marked an impressive 8 percent increase in meeting planners
with 679 attendees, as well as 248 exhibiting companies
and 617 exhibit personnel. The remaining show for 2005
is HSMAI's Affordable Meetings® National, Sept.
7 - 8, 2005 at the Washington Convention Center, Washington,
D.C. Click Here for more information on exhibiting at
Affordable Meetings National.
Click
Here for more Biz Travel News on HSMAI's
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CRUISE NEWS ---
CLIA REPORTS STRONG DEMAND
FOR CRUISING
The Cruise Lines International Association
(CLIA) said strong demand fueled a robust first quarter
for cruise vacations. In the first three months of 2005,
the 19 CLIA-member lines carried 2.63 million worldwide
passengers, an 8.9 percent increase over the same period
last year. North American passengers grew by 12.9 percent
to 2.34 million guests. CLIA cruise lines also posted
occupancy rates of 104.3 percent in the first quarter,
compared with 103.3 percent for the prior year. "The
cruise industry's strong first-quarter 2005 passenger
totals provide further evidence of the fertile consumer
interest and demand for cruise vacations," said
Terry Dale, president and CEO of CLIA. CLIA's first-quarter
report also found that itineraries of one to five days
accounted for 31.7 percent of the cruise market. Six-
to eight-day itineraries accounted for 54.3 percent,
nine- to 17-day cruises accounted for 13.7 percent and
voyages of 18 days or longer were 0.4 percent of the
market. The average length of a cruise in the first
quarter was 7.33 days versus 7.09 days for the same
period in 2004.
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ONLINE ISSUES ---
b
Four in 10 online travel shoppers have shopped an online
travel agency site, but ultimately purchased direct
from a supplier, according to a new report published
by PhoCusWright Inc. This behavior is more pronounced
for air than any other segment. Findings from the newly
released The PhoCusWright Consumer Travel Trends Survey
Seventh Edition, which surveys "online travelers"
in the U.S., found that nearly half of online travel
shoppers have looked at online travel agencies but ultimately
purchased direct from an airline (either through the
call center or Web site). That compares to three out
of 10 who have shopped online travel agencies but ultimately
purchased direct from a hotel or car rental company.
LOYALTY
REMAINS ELUSIVE FOR ONLINE AGENCIES
The PhoCusWright Consumer Travel Trends Survey
also shows that loyalty remains elusive for online travel
agencies and suppliers alike. But in the past two years,
online travel agencies have been losing coveted customers
to the supplier-direct channel, which includes the supplier
Web site and call center. Low price guarantees, loyalty
points, and improved Web site navigation and services
have impacted this shift. More than twice as many online
travelers (36%) believe that the supplier-direct channel
provides the best customer service compared to 15% who
choose the online travel agency channel. Even offline
agencies, which are coveted for their personal touch
in a technology-driven world, did not fare as well,
with 33% claiming they provide the best customer service.
Almost four out of 10 (38%) online travelers believe
that suppliers offer the lowest prices, up from just
14% in 2002 - a 24-point gain in two years. Despite
this improvement, more shoppers (45%) still think that
online travel agencies offer the lowest prices - by
far their largest asset in the minds of consumers. Online
shoppers believe that suppliers offer the lowest fees
(44% vs. 29%), most bonus miles/loyalty reward points
(51% vs. 14%), and an easier change/cancellation policy
(39% vs. 17%) compared to online travel agencies.
HILTON
TO ACCREDIT THIRD PARTY TRAVEL SITES
Hilton Hotels Corporation (HHC) has introduced
a new distribution standard and online accreditation
process, effective immediately. The new standard provides
that when a Hilton Family hotel opts to offer third-party
online merchant or opaque inventory, the company requires
them to participate solely with HHC Accredited Distributors.
Highlights of the Hilton Standard and Accreditation
Process includes consistent delivery on the Hilton Family
Our Best Rates Guaranteed promise. Expedia.com and Hotels.com
are the first fully accredited distributors. Hotwire.com,
Priceline.com and Travelweb.com have received temporary
accreditation (and are actively working with HHC toward
full accreditation status). This enables Hilton to implement
the new standard with more than 80 percent of the third-party
online merchant/opaque market.
LOS ANGELES
SUES ONLINE AGENCIES TO PAY HOTEL TAXES
In a suit brought by the City of Los Angeles
which argues that online agencies must remit hotel occupancy
taxes on wholesale or retail rates, the defendants --
Priceline, Travelocity, Hotels.com, Expedia, Hotwire,
Travelnow, Orbitz, Cheap Tickets and Cendant -- argued
that a city ordinance, amended in July to specify their
requirement to pay hotel occupancy taxes on retail rates
was improper because new taxes must be subject to public
referendum. They also contended that their cases should
be separated. Steven Wolens of Baron & Budd, which
is a co-counsel representing the city, said that the
defendants are required to pay tax on the retail rate
because they fit the definition of "managing agent"
under both the prior and amended law. The next hearing
is set for Sept 14. - Travel Weekly
Click
Here for more Online Issues on HSMAI's
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ASSOCIATION NEWS---
CAREER CENTER SERVICES INCLUDES JOB
POSTING, SEARCHING AND CAREER DEVELOPMENT
The Marketing Career Network (MCN), which HSMAI is a
member of, continues to add quality candidates and open
sales and marketing positions, and resources. HSMAI
Members can post
open positions that will automatically be listed
on all MCN Partner Career Centers at no extra charge.
HSMAI members also have access to exclusive Career
Development resources, such as resume critique and
career coaching services, and can search
open positions and post resumes.
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