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. . Is the Party Over? . The Challenge of Decreasing Hotel Room Demand |
by Carol Verret, October
2006
Is the party over? Has the hotel industry been lulled into becoming �fat, dumb and happy� after the stunning REVPAR growth of the last 2+ years? Has the industry peaked and is now on the downside of the curve? Smith Travel reports that nationwide demand was virtually flat this summer and began to decline by 4% or more in the last two weeks of September. Mark Woodworth with PKF forecasts that for full service hotels nationwide in 2007 demand will increase by only .04%, ADR by 2.5% and REVAPR by only 2.9% versus a forecasted 9.5% increase for 2006. For the top 51 markets in the US, those predicted to experience the most growth are both in New Jersey, Newark and Edison and they will post gains in REVPAR of 6.2% and 5.3% respectively. At the bottom of the list is the market of Miami, expected to decline in REVPAR by 6.5%. The question is how many hotel budgets were conceived in the haze of the �irrational exuberance� of the past two years, to quote Alan Greenspan? Those that were based on historical numbers and not industry forecasts will lean on their sales departments to fill in the gap between the budget and reality. In the past several years, the role and function of the sales department has changed substantially in some hotels. In many hotels (but certainly not yours!) sales has been relegated to the role of �order takers� and bookers of �SMERF� groups to fill in the slow times as burgeoning demand was beating down the door to get in most of the time. Having seen this happen in other periods of peak demand, this is not surprising. As the cycle turns downward, the expectation is that sales will have the right staff and the right skills to generate demand that hasn�t been pursued for several years. What can management do to gear up the sales pipeline in a hurry to counter balance the decline in transient demand?
Carol Verret And Associates Consulting and Training offers training services and consulting in the areas of sales, revenue management and customer service primarily but not exclusively to the hospitality industry. To find out more about the company click on www.carolverret.com. To contact Carol send her an email at [email protected] or she can be reached by cell phone (303) 618-4065. copyright © Carol Verret, 2002-2003 -2004 -2005 - 2006 |
Carol Verret 5910 S. University #C-18, PMB 374 Greenwood Village, CO 80121 Telephone: (303) 618-4065 [email protected] Web Site: http://www.carolverret.com/ Email: [email protected] |