News for the Hospitality Executive
It is a Delightful Time to be a Traveler Looking for Lodging;
Bad Business Climate Means Good Hotel Rates
|By Tom Belden, The Philadelphia InquirerMcClatchy-Tribune
By any measure, this is a dreadful time to be in the hotel business - and a delightful time to be a traveler looking for lodging.
The deepest recession most of us have ever seen is keeping millions of leisure and business travelers off the road and sending hotel occupancy into a steep dive. Although the pain is widespread, upscale resorts are in the worst shape now that they're off-limits to bankers getting federal bailout funds.
But for those trying to be frugal and civic-minded, recessions are a good time to help your local economy. If you can still afford to hold business meetings or escape for a vacation, why not spend the money close to home?
Our two major promotion agencies, the Philadelphia Convention and Visitors Bureau and the Greater Philadelphia Tourism Marketing Corp., are loaded with offers and ideas designed to keep your travel spending from leaving the region.
There's no question that many travel companies will struggle this year and into 2010.
In mid-March, the PKF Hospitality Research firm said it expected hotel occupancy nationwide to be down 8 percent this year from 2008. More troubling, what hoteliers call RevPAR, or revenue per available room, calculated by multiplying a hotel's average daily room rate by its percentage of occupied rooms, is expected to be down almost 14 percent.
That will translate into the biggest plunge in U.S. hotel profits - about 30 percent from 2008 - since the 1930s, PKF said.
"When you're looking to save money, travel is one of the first things to be cut," said Robert Mandelbaum, PKF's director of research-information services.
In the Philadelphia area, room rates and occupancy levels have dropped roughly 10 percent, and RevPAR has plunged 18 percent since Jan. 1, according to PKF's Philadelphia office.
"Everybody is trying everything they possibly can" to attract customers, said Bill Fitzgerald, president of the Greater Philadelphia Hotel Association and general manager of the Doubletree in Center City. "This is worse than after 9/11."
The tourism marketing agency continues to promote its hotel packages for individual travelers, many of which currently include $75 worth of free parking. Hoteliers are under relentless pressure to lower room rates because "the traveler is really waiting until the last minute to see what's available," said Jeff Guaracino, vice president of the tourism group.
There are some bright spots on the horizon, however, Guaracino added. The visitor agencies are hoping for help from people drawn to another of the city's blockbuster museum exhibitions, this time the Franklin Institute's "Galileo, the Medicis and the Age of Astronomy," which opened last week, he said.
The convention bureau, which handles promotional efforts aimed at filling hotels with business, professional, and social groups, has used the themes "Bring It Home" and "Keep It Home" to encourage local companies to hold meetings in the city.
This spring, the bureau adopted the tag line "Serious Value for Serious Times" to try to grab slices of a shrinking pie: a sharp drop nationwide in the number of business meetings being planned in the coming months.
The decline in group gatherings is the result of the economy overall and criticism of the free-spending ways at five-star resorts of American International Group Inc. and other financial-services companies that are getting government aid.
Attacks by politicians on AIG and the others prompted nine national industry organizations to launch a "Meetings Mean Business" campaign last month to counter the notion that all group gatherings are junkets.
Danielle Cohn, vice president of the Philadelphia bureau, said the local and national campaigns appeared to be working to generate interest among corporate meeting planners. Philadelphia is being helped, she said, because many planners of health-care and education-related events know it already as a place for economical, no-nonsense meetings.
If you're contemplating Philadelphia for a business or leisure trip, it's a good idea of shop online, both on the region's official sites, www.gophila.com and www.philadelphiausa.travel, and national ones, including www.hotels.com and www.quikbook.com.
I recently experimented with using www.hotwire.com for the first time when I needed to spend a night in a Center City hotel. Hotwire offers deep discounts if you agree to pay in advance for a room of a certain quality level in a particular part of a city but let the booking service choose the hotel.
For $65 plus tax, I stayed in a standard room at the Sheraton City Center
at 17th and Race Streets. I had hoped Hotwire would find me a room a few
blocks to the south - say with a view of Rittenhouse Square - but I couldn't
complain about the price.
Contact Tom Belden at 215-854-2454l or firstname.lastname@example.org.
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