Carol Verret Consulting and Training Consulting Training Seminars |
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. . Driving REVPAR in the Current Economy The Shift from Managing Demand
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June 25, 2008 - In the past eighteen
months, demand has remained relatively flat while rate has increased by
between 7% in 2007 and almost 9% in 2006. The consumer that seemed
so resilient to rising hotel rates has �collapsed�, in the words of Bernie
Sternlicht, Chairman and CEO of Starwood, pressured by rising gas prices
and the resulting cost of goods, not to mention the loss of equity in their
largest investment, their homes. (BTNOnline, June 2, 2008))
Three �lions� of the industry, speaking at the recent hotel investment conference in New York, indicated that they expected eighteen more months of softness in the hotel industry. J.W. Marriott, Bernie Sternlicht of Starwood and Jonathan Grey with Blackstone (owners of Hilton Corp.) all saw a protracted period of soft demand for the next eighteen months that will make it difficult to move rates, a fact that is already reflected in the smaller percentage increases in ADR. (BTNOnline, June 2. 2008) PKF sees a bottom in the current cycle around November 2008 with recovery beginning in the first quarter of 2009. (Mark Woodworth, June, 2008) However, that prediction was made prior to the announcement by the airlines regarding massive cuts in capacity; United is parking 100 airplanes, increasing fares and additional fees like those for checked luggage. Recently, I had the privilege of speaking and facilitating a discussion at a meeting called by a hotel company to assemble their GMs, Revenue Managers and Directors of Sales to brainstorm on ways of increasing revenue in the last half of 2008. They normally have meetings in the fall to plan for �09 but felt that they needed to plan for the second half of �08 before they could begin to plan for �09. There is a reason that GDS transactions in the Americas have decreased by 7% in the first quarter of 2008 on Galileo (Travel Management, May 14, 2008) while Expedia has reported an 8% increase and StarCite RFP requests have increased by almost 7% as of April YTD. Planners across all segments have turned to the internet to find the best value for their vacation, their company and their meetings! The focus is back on the hotel sales and marketing department to generate more demand to pick up the slack. It�s time to flex that �prospecting� muscle:
(Join us in Phoenix July 24 at the Radisson Airport North for �I Hate Cold Calls� sales training open to all members of the hotel sales community � click here for more info.) 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. Visit www.hotelsalesblog.com. copyright © Carol Verret, 2002-2003 -2004 -2005 - 2006 - 2007 - 2008 |
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] |