Weekend Hotel News Round-Up

By Ted Mandigo

February 28, 2009 8:07 PM

http://www.hotelnewsresource.com/article37328.html

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.


http://www.hotelworldnetwork.com/economic-trends/q4-earnings-reports-show-hit-hotels

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…


http://www.bizjournals.com/sanjose/stories/2009/02/23/daily79.html

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.


http://www.nytimes.com/2009/02/15/us/15vegas.html?ref=business

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.


http://www.hotelnewsresource.com/article37318.html

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


http://www.usatoday.com/travel/columnist/grossman/2009-02-24-ten-travel-trends_N.htm?csp=34

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.


http://www.hotelemarketer.com/hotel-online-distribution/hospitality-bloggers-and-experts-thoughts-on-hotel-internet-marketing-in-2009/

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


http://www.hotelchatter.com/....Which_Trendy_New_Budget_Brand_is_the_Best_

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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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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