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TR Mandigo Joins Horwath HTL

By: Richard Mandigo

October 01, 2013 8:05 PM

Our website has been pretty stark lately because we've been working on a big new project:

We've joined Horwath HTL, an organization of Hotel, Tourism and Leisure specialists in 39 countries around the world.

What we do won't be changing, but we'll be able to use the skills and expertise of hundreds of experts in virtually all areas of hotel and tourism planning, development, and operations.

We probably won't be posting new blog articles on this site anymore, but updates from us and many other consultants can be found at

To learn more about Horwath HTL, please visit our new website

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Big Changes Coming Soon


April 04, 2013 2:17 PM

Once again, our main page has been sadly neglected for far too long. However, we've been quite busy. We have some big changes coming soon, which we hope to be able to share later this month when all the paperwork has been finalized.

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August 2012 Chicagoland Market Conditions


October 10, 2012 2:39 PM

On our Industry Research page, we have uploaded the reports on market conditions for the O'Hare, DuPage, and downtown markets given during August 2012.

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Updated Proposed Hotel Map

By: Richard Mandigo

June 20, 2012 3:04 PM

We've just updated our recently completed and proposed map. Lots of new and proposed development occurring in and around the city lately.

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Chicago Outlook 2011

By: Richard Mandigo

August 02, 2011 4:58 PM

We have a new report available in the research section of our site. It's the report we gave on Tuesday morning to the Chicago General Managers of the IHLA. It covers topics of concern in the Chicago hotel industry and our projections through 2016.

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Why the blog page is so empty

By: Richard Mandigo

February 09, 2011 5:45 PM

The blog section of our website is pretty empty these days, though not for lack of anything to say!

Starting today, you can now find our occasional commentary in Hotel News Now!

We may still occasionally update this blog, but it'll be for smaller or more locally focused stories.

Hotel News Now is a Division of Smith Travel Research and hosts a wide variety of content related to hotels, from management to lending and more.

They can be found online at

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Nightclub Hotels

By: Richard Mandigo

August 02, 2010 1:45 PM

According to the latest J.D. Power and Associates rankings, the new hotel chains to look out for are the aloft and the Indigo, which represent a similar style and a similar departure from traditional hotel chains.

These two hotels feature modern, edgy style that attempt to market to a younger demographic. Hotel brands are once again in a period of growing pains, trying to appeal to gen-Y as they become part of the consumer base.

The brands to a certain extent are taking their cues from boutique and lifestyle hotels around the country but particularly in New York City. Unfortunately, nobody has satisfactorily given a concrete definition of what these terms mean. I’ll just throw out some definitions to make it easy. Boutique hotels came first, and are generally smaller upper upscale or greater hotels, which offer a high level of amenities and services. Lifestyle hotels followed, can be thought of in much the same way, but specialize further, focusing on spa services or more frequently, nightlife. Essentially, it’s the same as a boutique, but it's trying to appeal, or give the appearance of appealing to a younger generation.

Surprisingly, hotel brands have already learned some important lessons from lifestyle hotels. If you look at new construction or brand renovation standards, it would look similar to a boutique hotel. Hotels today use more interesting furniture and bolder colors. They’ve already integrated most of the latest technology into their rooms. The average new or renovated hotel no longer looks like someone’s grandma designed it.

The term I like to use for what came next is “Nightclub” hotels. As mainstream hotels adopted many of the things that made boutique properties special, new hotel concepts were pushed further to the extreme. These hotels have been the norm for the last decade in Vegas, and started showing up in New York a little afterwards. A nightclub is built to be on the bleeding edge of what’s cool right now, typically at a high cost, and it lives or dies by the buzz it generates, moreso than a bar or coffee shop, which rely on a steady stream of regulars. When a nightclub opens, it basically already has an expiration date. A typical hotel is built for over 20 years. Even though they all serve drinks, a nightclub has to constantly re-invent itself to stay on top of the trends, which means in hotel terms, that lifestyle hotels have a much shorter shelf life than a traditional hotel. Their renovations have to be more frequent and likely more expensive or they will lose buzz which is their lifeblood, which is frequently lost when the next hotel like it opens anyway.

This works in New York City, because hotels run at much higher occupancies year round and they can afford the extra supply. Elsewhere? That remains to be seen. While they’ve been successful in Miami, the market has been strained recently. The Chicago market can reasonably only support a few such hotels compared to New York.

A few lifestyle hotels in a market represent an alternative to traditional properties and capture guests from a theoretically untapped market. The target demo for these hotels is young. In most cases outside of New York, it remains to be seen how deep the pool is. (Anecdotally, most of the working 20-somethings I know stay at business hotels.)

This places these hotels in a bit of a niche. However, the real boon for these hotels is that, like a nightclub, while they’re built to attract the young-and-hip, they also attract people who wish-they-were-young-and-hip. People in their mid 30’s or older, who can afford to spend more at a hotel while they’re on the road for the experience.

The question is, are lifestyle hotels the next short-term trend like condo hotels were before them? In the sense that they’re mostly a buzzword that developers throw around trying to finance their hotels, yes. Like condo hotels, they don’t work as well in reality as they do in New York.

Overall, though, they’re here to stay as an alternative to the traditional hotel. And like all alternative-culture movements, if too many people start doing it, the magic will be lost. When one lifestyle hotel opens, it takes business away from say, a Courtyard by Marriott. When a second one opens, it takes business away from the first, and both need to compete to induce demand from traditional sources. When they reach critical mass, they’re more likely to cannibalize each other than they are other hotels, or just give up the edgy image and become a normal hotel.

To an extent, it should be a somewhat self-correcting trend, because when the first rounds of major renovations are needed, we’ll see how dedicated these hotels are to staying on top of the trends if it means a higher cost.

Aloft and Indigo are essentially lifestyle-lite. To the extent that they have succeeded, they’ve done so because they’re edgy, but underneath it, they’re basically normal brands. The rooms aren’t very different aside from the paint color and the look of the furniture. They’re a bit more expensive to build than a traditional hotel, and the rooms rent out for slightly less, but these variances aren’t huge and some of the lower rate can be chalked up to traditional ramp-up discounting.

When the Hyatt Place concept launched, a lot of complaints from owners and guests revolved around the coffee bar concept, which was seen as out of place and a bit of a hassle. We’ll see the same thing about the pool tables, lounges and other design choices Aloft hotels have made. Ultimately, the pool table isn’t really there for people to play pool on, it’s there because it’s part of the image of the hotel.

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Recovery, in a sense

By: Richard Mandigo

June 01, 2010 4:08 PM

Earlier today, someone told me that our last update on our website’s blog was from October 2009. The truth is, we pretty much just forgot about it for a while. We’re sorry about that!

A lot has happened over that time. There have been tons of articles that could tell you what happened technically, but since this is a blog, I figured I’d try to use as little jargon as I can.

So, people pretty much agree that we’ve hit bottom and now it’s just a matter of time until we start seeing decent recovery. The question of exactly how long that will take is the real trick, of course. Just because something’s not getting worse doesn’t mean it’s getting better.

A lot of different consulting companies have had forecasts out for last year and most of this year that have been revised extensively. This means that the companies can look back at the end of the year and point to their revised forecasts and produce almost perfectly accurate results. To use a bad sports metaphor, it’s easier to know who the winner of the World Series is going to be in October than it is in April. Just don’t claim that you knew what the results were going to be back at the start of the season.

These are still useful tools, and we’re not going to disparage the hard work that went into them. But if you’re looking at where a hotel is going to perform in a year or three, you need to know that in a recovering market, things change, and quickly, and that projection scenario is really more of a best-guess than anything else. There’s a reason long reports come with so many clauses.

It’s pretty easy to guess where something is going to go when you’re in a stable market. It’ll grow a bit, year by year, and then it’ll even out. Occupancies will go up, rates will go up with them, and when occupancies flatten, the rates will still climb a bit further. That’s probably what you’ve read if you’ve ever seen a feasibility study. It’s the most normal scenario.

For a while now, everything’s been going down, and fast. The problem is, now that occupancies are starting to come back up, rates aren’t coming back up with them. And it’s not logical or mathematically sound or statistically probable from past trends. This may all sound a bit self-defeating, but it’s honestly not. It’s just important to know what you’re getting when you look at these projections.

Rates are still down because of a bunch of factors, some of which were accounted for, and some which weren’t. Things like the growing role of travel websites account for some of it. Package deals are part of it. Three nights for the price of two and similar deals help keep up the daily published rate, but are still giving away a night for free, which hurts. The consumer is keenly aware that they can still get great deals, and so they’re going to push harder to get what they perceive as a bargain. And probably the most difficult to predict, hotelier confidence hasn’t come back.

We’re at a point where things are starting to look better, but it seems like it’s very tenuous. Although occupancies are up, the people running the hotels don’t want to do anything to jinx it. This pretty much directly translates into keeping prices low. There’s a lot of data out there that suggests that like most superstitions, this doesn’t have a lot of basis in reality. But it FEELS right. And what’s worse, nobody wants to be the first person to test it out, because if no one else does it, then yes, your customers will go elsewhere for a bargain.

The hotel industry is legally prohibited from sharing rates and such with other brands or hotels because it would be considered collusion. Lots of other industries get around this. Some with fewer scruples than others, but there’s an easy legal way to get your rates back up.

It’s called confidence. And until the whole industry believes we’re actually recovering, those rates are going to stay low. And confidence isn’t something that’s usually taken into account in projections.

A lot of companies earlier this year showed forecasts with all three key metrics down to varying degrees, or only token increases in occupancy. Our earlier forecasts for this year were probably a bit too aggressive in Average Daily Rate, which is remaining flat, but our projections for increased occupancy and revenue per available room have been pretty much spot on.

Since I’m writing again, expect a new article soon about “nightclub hotels”, and why I felt the need to just completely make up a new term to describe a growing phenomenon.

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Hotels Vs. Expedia Vs. Customers

By: Richard Mandigo

October 26, 2009 11:42 AM

I’ve not updated the blog in quite some time, and although there have been a ton of hotel-related developments in the news lately, I haven’t felt like I’ve had a whole lot different to say from everything else that’s out there. This weekend however, I was reminded of the recent dust up between Expedia and Choice hotels, and the larger struggle between online hotel booking sites and the franchises themselves.

As a bit of background that I’m sure most everyone already knows, online hotel sites make deals with franchises and individual hotels to take a block of rooms and fill them for the hotel at a discounted rate. It benefits the booking site, because they make a profit off of each booking, and it theoretically benefits the hotel because it brings in more customers. Except, of course, that many hotels are finding that many of the customers booked through online sites would have, in the past, bought the same hotel room through a different service for a higher price. It’s a bit of a deal with the devil for the hotels, because while they are looking for ways to increase their prices, they can’t afford to lose room nights, and as Choice is finding out, you can’t negotiate with a company that’s in a better bargaining position than you. So now, they have to fend without the extra occupancy that comes from being on Expedia. It’ll be interesting to see how that turns out. But that’s not really my story.

We went down to a wedding this weekend after booking a hotel online. The ceremony began at 3:30, and we had left plenty of time to get down there and change into our dress clothes. We arrived at our hotel shortly after 1, and asked for our rooms. The clerk insisted that they were not ready yet, and that their check in policy stated that you could not be let in before 4 PM. I asked if there were any other rooms we could use just to change beforehand, and she stated that there were not, then offered to let us change in their public washrooms. Thanks, but no. I was getting upset at the bad service, and I’ll admit I could have handled the conversation better, but I’m involved enough in the industry to know that’s not how you run a hotel. But, like everyone’s shared horror stories of waiting at the DMV, this person had an iota of power and by God, she was going to use it. I asked to speak to the GM. She moved on to the next customer, who she proceeded to check in, no problem.

Finally, I talked with the assistant GM who put me into a handicapped room, so that we could change for the wedding. But the experience was already ruined. And it got me thinking, why did a relatively normal situation like that turn into a confrontation? Ruling out myself as the culprit (how could I be at fault, after all?) I settled on two possible reasons, both of which speak badly for that particular hotel and hotels in general.

  1. Bad training. This is sort of an obvious one, but poor training has permeated the industry of late. Whether it’s front desk staff who care about as much about their jobs as they would if they were working a check out register on the low end, or boutique and luxury staff whose bad attitudes seem to say “you’re lucky I even let you in my hotel”, staff attitudes are a major problem in hotels today. I’ve worked the front desk. I’ve had bad customers. I know. But the job of the hotelier isn’t to protect his or her ego from being bruised, and that goes all the way down. Whether you know for a fact that you’re right or wrong, you are wrong, because the customer is always right. If there is a problem, you fix it for them. You’ll probably charge them on their bill, because it’s a service, not a charity, and that’s fine. You don’t say NO unless it’s something that’s clearly wrong. You are not more important than the guest. They are the most important thing in the world as long as you’re working at the hotel. When you punch out and go home, you can go back to being as arrogant as you want, but you cannot do that from behind that desk, or anywhere else in the hotel for that matter. It’s not just another job, because having a good attitude is absolutely essential. I forget who said it, but the truth is, every guest is a VIP, even if some are more VIP than others.

  2. Attitude from above. Going along with point 1, this one can show very clearly in hotel staff. If the managers are aloof, the staff will be too. If they don’t care about the guests and treat it like “just a job” so will everyone else. If they’re treated as expendable they’ll act like they don’t matter. And to bring this back around to my earlier point, if they make a habit of complaining about how Priceline and Expedia are hurting their business, it’s going to show through in the way their staff interacts with their clients.

You can go ahead and bemoan the damage the online booking companies are doing to your bottom line as much as you want when you’re doing your balance sheets, but it’s an absolute sin to treat your guests as less important just because they used the tools they’ve been provided to get a better deal. It’s easy, it’s convenient, and it saves money, and they shouldn’t have to suffer through attitude or worse service once they get there just because you don’t like that they saved a few bucks. It’s not their fault.

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The Flurry to Position for Aquisitions

By: Ted Mandigo

August 13, 2009 11:46 AM

We’ve had two new financial instruments enter the Wall Street market to raise funds, including a $1.5 billion IPO from Hyatt and an $810 million fund for Starwood Properties (a unit of Starwood), both earmarked as intended for acquisition of troubled and non-performing assets. In addition, we've recently seen news that Blackstone is looking to offload its Hilton portfolio, possibly by breaking up the company into smaller collections. While it's indicative of the fact that Q2 earnings were way down and that these companies are looking for ways to raise capital, It's also a sign that we've hit bottom. Generally, the big trend near the top of the cycle is to go private, now the major players are going public. That these companies feel like they can pick up hotels on the cheap means that they're seeing a big upside potential coming down the road.

Non-performing/troubled assets by definition will require patient money and additional investment to carry the properties through a turn-around as well as most likely significant PIP and deferred maintenance attention to bring the properties back to a competitive position.

If you've spotted the inconsistency there, it's because while a good asset CAN be distressed (especially given how many hotels are highly leveraged), it's unlikely to result in a catastrophic doom-and-gloom scenario where every hotel out there is going to default. Of course, SOME will.

There's a sort of general sense that everyone's on the sidelines waiting for their favorite hotel to fall into foreclosure so they can snap it up, in some sort of hotel-buying feeding frenzy, but logically, the situation is much the same as it's ever been.

During these troubled times, those assets which are up for sale will most likely trade well below replacement values, but the carry costs and risk of acquiring those properties will be significant. Just as much work as buying a distressed hotel on the upside. The difference is that now it's a bit cheaper, so more people are gunning for the good ones. It's complicated by the fact that there's less money out there to get them. As always, the distressed hotels are going to need a lot of work and money to get them up to profitability.

...Unless you've got a huge acquisitions arm, because I’m not sure that position is consistent with the investment strategy for those funds, which are ideally looking for well-performing assets, which they can essentially slap their name on.

Which means that, as long as you don't mind the fact that you're never going to have nearly enough shares to ever challenge a Pritzker, or Wal-Mart, or any of the other major holders, investing in a group that CAN move mountians at the bottom of a market is a pertty sweet deal, provided you have an idea of what you're getting into.

A realistic probable scenario would see REITs solicited for possible deals to sell their performing assets at current market values, to raise the necessary funds to carry the remainder of their portfolio through the current recession and into a recovering market. This would accomplish two tasks, supporting the weakened REIT market and providing the selling organizations with necessary resources to survive and providing those firms with ready investment cash with performing properties to enhance their portfolios at a significant discount. Cherry picking portfolios would also allow investors to be deliberate in acquiring properties that fit their portfolio and allow them to target markets that are not currently served by their brands, or improve representation in markets where they under-serve the market.

These huge organizations are also likely to look at possible chain or multi-property acquisitions, such as a possible fit with say, Hyatt acquiring Embassy Suites. These "new" brands would fill a niche and remain compatible with the organization.

This type of selective acquisition makes much more sense than targeting properties in such deep financial holes that they are teetering on the edge of bankruptcy or foreclosure.

There are certainly the funds out there waiting for the right opportunities, and those with the cash resources have multiple opportunities to jump into the market.

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2009 Chicago CBD Projections

By: Jim Battin

August 04, 2009 9:01 AM

We've recently made available our Chicago CBD Forecast for 2009. This presentation was given to the Council of Chicago Hotel General Managers today, August 4th, 2009 by Ted Mandigo.

Topics discussed include:

  • Our performance estimates for the remainder of 2009.
  • Meetings and convention outlook.
  • Projections in occupancy, ADR, and RevPAR for 2010-2014.
  • How the Chicago market is positioned in these challenging times.
  • Historic cyclical performance.
  • Estimated supply coming through the pipeline, and the impact the credit-crunch had on pending projects.

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Technology for Tough Times

By: Alex Siegman

June 03, 2009 12:55 PM

The June 2009 edition of Lodging Magazine has an excellent article regarding technology investment during the current tough economy. I was fairly impressed with the article, as it's one of the first articles I've seen that have clearly mirrored my sentiments: technology is never a place to cut back.

Not to sound presumptuous, but it is my opinion that all well run technology departments should always have leaders in place that make the business process their number one concern. If technology isn't supporting the business process, it isn't worth investing in. In hotels, this comes two fold. You have back of the house operations such as property management and yield management systems, reservations systems, energy management, security, and other such systems as well as guest experience to worry about - wireless and wired Internet, a business center, TVs, iPod and iPhone compatible in-room devices, and so forth.

The Lodging Magazine article makes many good cases and presents several scenarios where current Chief Information Officers are spending their IT budget to streamline costs and boost revenue, all while considering the economic forecast and guest experience. It's well worth the read for any hotelier or technology professional, as this mentality should be something many businesses need to consider adopting in these times.

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Quote in Monday's Trib

By: Richard Mandigo

June 01, 2009 2:25 PM

We've been quoted in an article in Monday's Chicago Tribune. The article talks about the opening of the Wit, but focuses on the effect that an influx of new hotel rooms has on a market already battered by the recession.

You can find the article here

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Populism vs. The Hotel Industry

By: Richard Mandigo

March 31, 2009 3:23 PM

March has been a bizarre moth, to say the least. We've seen extreme lows, the beginnings of recovery, and a million other things that no one has yet figured out. Is the worst over? In hotel terms, probably not, even if the economy only goes up from this point onward. Generally, the hotel industry is one of the first to suffer the down effects, and one of the last industries to recover. Almost everybody agrees that this year will be a write off, and several prominent consulting groups have revised their forecasts downward recently. With all that going on, what else could possibly be worth talking about?

For starters, STR released their February Market Data, showing a decline of 10% in occupancy and 7.8% in rate. Though these results are for the US as a whole, some markets suffered worse than others. Phoenix has taken the absolute worst of it, down 34.9% in RevPAR. The situation isn't good anywhere, really, but if you're looking for a bright side, it might be that some cities are a bit more insulated from the recession than the overall market. As should probably be expected, the luxury market took a beating (RevPAR down almost 30%!), while the economy market posted smaller declines. Will this mark a trend for hotel chains to again start focusing on downscale products?

Probably not. Hilton's newest brand is just the latest entry in the edgy-boutique-style-hotel category. When the W first came onto the scene, it raised a bunch of eyebrows. Now that everyone and their brother has a edgy, modern brand, the concept is beginning to lose some of its lustre. I mean, I get the concept, appeal to a younger crowd, charge more for what would otherwise be an upscale product, get people to see the hotel as a's admirable. Ironically, by trying to be so unique, they're starting to blend together.

Once you get past a a certain service level, hotels all basically offer the same amenities. Sure, maybe the soap's organic, or the sheets have a few hundred more threads per inch, but the name of the game becomes perceived value, as opposed to actual value. Is the guest going to pay an extra 50 to 100 dollars because the hotel is ultramodern and "cool"? Two years ago, the answer would have been a definite yes. Now it's a "maybe". It'll work in New York, or Miami, or a few other places, sure...but it sure won't work as well as it would have four years ago.

Speaking of four years ago, in 2005, we were one year out of the last major recession to cripple the hotel industry. The one that everyone was supposed to have learned all these important lessons about what to do the next time something earth shattering came along. One of the most important lessons was that deep discounting did not really help bring in more customers. With the start of this recession, we saw hotels react by initially being disciplined enough to remember to hold their rates. That lasted a few months, tops. We're back to a cycle of discounting by many hotels, or token rate increases of under 3%, in some cases. Ironically the one sector that has been holding its rates is the luxury sector, which is already the target of a bit more populist outrage than the brands would like. Luxury hotels used to be unique destination hotels. Now they're just another flag in a larger portfolio. So rather than target an individual hotel, it's easy to attack the whole industry. And related industries.

There's two ways to deal with populist outrage, one, you can address the complaints being leveled. Two, you can complain that the charges against you are unfair. The brands chose the latter. After all, they're a big important industry, and they didn't waste everyone's money like investment groups.

There's a few problems with the "whiny" approach. One, the hotel industry itself is NOT the target of populist outrage. The excesses of companies taking tax payer dollars and then spending them on luxury resorts did trigger public outrage, true, but the decline of the high end retreat is a self fulfilling prophecy from companies worried about public opinion. By whining about unfair treatment, the hotel industry has thrown its lot in with Wall Street.

Hotels have become a huge industry, serving a huge cross section of people. But, the hotel industry has been almost singularly focused on getting people to pay more for essentially the same service, and their approach has been to go "boutique". And it used to be just fine, because you could get a loan to build pretty much whatever you wanted.

But if luxury hotels are truly going out of style, a few editorials in the Wall Street Journal aren't going to change the inevitable. The hotel industry is not just the privilege of the rich. It serves a valuable role for commerce on a community level.

So why not look at this recession as an opportunity to focus on the mid-range or upscale brands, which have been virtually unchanged since the 90's. Why not build new brands (like the NYLO) that are budget conscious, while still delivering modern amenities. It's not impossible, and it's not even really that difficult. Heck, just focusing on modernizing brands would do a world of good.

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Quote in Thursday's Trib

By: Richard Mandigo

March 05, 2009 10:17 AM

There's an article out in today's Chicago Tribune by Mike Hughlett about convention Business in which we've been quoted. The article makes the point that conventions are getting hammered by negative press. Consequently restaurants and hotels are taking a hit as well.

As we've said before, the upside is that Chicago is seen as a "serious" destination, and likely to be hit somewhat less hard than Vegas or Orlando.

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Weekend Hotel News Round-Up

By: Ted Mandigo

February 28, 2009 8:07 PM

Hotel News Resource (along with other sites), is reporting STR’s weekly results for the week of Feb. 21st, and they’re not pretty. Compared to last year, occupancy is down 11.6%, and ADR is down 7.2%. Last week, they were down 9.6% and 7.4%.

In Downtown Chicago February looks dismal, but January had a shot in the arm from a couple of citywides that resulted in an actual increase of 0.5% in number of room nights, above last year’s level. Occupancies dropped because of supply increases, and rates were also hit with packages, discounts and mid-winter promotions. It looks like about a 2 point drop in 2009 from 2008 levels (CBD only) with an 8 % drop in rates.

Suburban Chicago has seen the worst of it with 25% drops in RevPAR almost across the board. The airport was particularly hard hit, but that is in comparison with last year (08) when we had a strong January thanks to distressed passengers when all the east coast was hit by storms. We’ve been warning hotels not to drop their rates, because as soon as one hotel starts cutting prices, it’s pretty much a race to the bottom. As the recession drags on, keeping prices up seems like it’s going to be a very difficult goal.

Hotel World Network has compiled the Q4 earnings reports from the top publicly traded hotel companies. In short, Intercontinental, Wyndham, Marriott, Accor, Choice and Starwood are all down. Hilton is privately held company, but if you thought Blackstone overpaid last year, well…

Business Journal (From Hotel News Network) Hotel CEO’s have sent a letter to Congress urging them to stop criticizing hotel travel. It seems pretty unlikely that Congress is going to stop its populist streak any time soon, but the hotel industry obviously needs to give it the old college try. It’s a hard case to sell, since conferences just look bad. There are serious economic ramifications from the cancelling of so many meetings, but it seems to me they’re going about it the wrong way. Most meetings aren’t at luxury hotels, they’re in 3-star or lower convention hotels, and they’re regional meetings that basically have to take place. In addition, hotel CEOs should be framing their argument in a larger context. Luxury hotels are purposefully high end in services and amenities, but they make up a small percentage of the hotel business overall. Service jobs are a major component of the American economy as a whole, and blaming the hotel industry as being excessive amounts stating that a good third of the economy is frivolous, and that’s an argument that no one wants to make.

The New York Times has an article about the effects that the taboo on conventions is having on Las Vegas. Long story short, it’s bad. Unless you’re Chicago, because unlike Miami and Las Vegas, it’s not seen as a “fun” destination.

Hotel News Resource has an article by Earnst & Young about ten industry trends which will shape the hotel industry in the coming year. They range from the obvious, such as “Debt” and “Cost” to the slightly-less-obvious, “alternatives” and “stimulus”. It’s definitely worth a read, and if you’ve got tons of time, you can download their 124-page 2009 lodging report which provides an extensive overview of the hotel industry.

Link to the E&Y Document

USA Today’s David Grossman has another top 10 list of trends, though some items, like the “Resurgence of Internet Fares” aren’t going to be as major as he thinks, because unlike the 2001 recession where deep online discounting hurt the bottom line of the travel industry, these websites have been brought into the fold, and hotels know how to account for them.

What’s happening with E-marketing? Several prominent bloggers have a roundtable to discuss what’s next.

Hotel Chatter asks the question we’ve been wondering for a while. Which trendy new budget brand is the best? Hotel Chatter loves NYLO, but it’s only one of a handful of brands, most of which are out of place anywhere other than an urban market. We’ve got our opinions. What do you think?

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HDTV and Hotels

By: Richard Mandigo

February 28, 2009 6:00 AM

Last week, I stayed at a four star hotel in Chicago, and while the room was very nice, the TV signal was being broadcast in standard definition on large HD screens. Now this may not sound very important, but if you’ve spent around $1,000 per room on brand-new televisions to impress your guests, having standard definition signal and HD TVs produces a picture that is worse than if you had kept your old boxy tube televisions. Because new TVs are built with such high resolutions to get the most out of HD signals, they have to stretch out standard signals several times their original size. This leaves the picture fuzzy, making text unreadable and making everything look like it was shot for a Barbra Walters special.

Now this next part is really important, even after the digital conversion clicks over, cable TV still doesn’t need to be broadcast in High-Definition. In fact, if you’ve got a cable box right now, chances are they’re broadcasting in digital standard-definition. For most cable companies, as well as dish networks, HD packages cost extra, and generally include a sports and movie packages. These represent a significant investment from the hotelier’s perspective, but after all, you’ve already blown all that money on buying brand new TVs, you might as well spend a bit more money to make them watchable.

There are other alternatives of course, with those nifty converter boxes the government has been handing out, you can receive HD broadcasting over an antenna, but God help the hotel that returns to rabbit ears. So the obvious solution is more expensive than you’d like, and guests may not be complaining about it yet, but as more people buy flat screens for their homes, the novelty of the technology will wear off, and they will.

We’re in the midst of a deep recession, and it seems absolutely ludicrous to complain about something frivolous, but if you’re running a four star hotel, guests are expecting a certain level of luxury. If they walk into a room and see a nice TV, they’ll expect the picture to be as good as the TV. And when they don’t get it, they’ll be as disappointed as if one of the lights in the room was out. Until you upgrade your signal, your fancy HDTVs are basically very expensive paperweights.

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Ted Mandigo, CPA, ISHC.
Director TR Mandigo & Co.

About TRM

TR Mandigo & Company is a Hospitality Consulting firm with over 35 years of professional experience. We specialize in hotel & resort market feasibility, litigation support, and portfolio valuation.

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