Categorized | Hotels


Posted on 23 August 2010

Hotels are reporting a rebound in business from group customers, a key segment that includes companies, associations, sports teams, religious groups, social organizations and the military. The U.S. Travel Association forecasts a 7% increase in meeting and convention spending this year, to $90.7 billion. That follows a 15% decline in 2009, when organizations canceled meetings, sent fewer employees to trade shows and insisted on bare-minimum amenities. Hotels and convention bureaus responded with aggressive deals and packages, such as providing free coffee breaks or discounts on audiovisual equipment. Groups are responding now, spurring an optimistic mood in the meeting planning and convention industry.


Buyers are facing their toughest hotel negotiating enviroment in several years, as hoteliers say they’re planning to push for rate increases amid rising demand and declining supply growth. Analysts, however, said many buyers would be able to stave off significant increases, particularly if they offer more flexibility in bargaining for amenities. Bjorn Hanson, divisional dean of the New York University Tisch Center for Hospitality, Tourism and Sports Management, said business travel demand began to make a noticeable improvement in March, but hoteliers did not respond with rate increases in case it was an aberration.


Demand continued to pick up from April through July, even though business travel recoveries generally happen not in the summer but in the fall or spring, so hotels will be coming to the table in a stronger position this year, he said. ‘Buyers should prepare for the most aggressive negotiating posture in three years,” Hanson said.


If online traveler reviews are an indication, guests of luxury five-star hotels are no more satisfied with their accommodations experience than are travelers who stay at moderate, two-star accommodations, at least according to a new study by PhoCusWright research. PhoCusWright’s Social Travel Advocacy Index, an index of traveler sentiment based on online traveler reviews, shows that the average STAI for the luxury five-star hotel category for 2008 was eight, significantly below the two-star hotel category, which scored a 13.


The STAI for the five-star category jumped significantly in 2009, when both hotel star categories scored a 15, PhoCusWright says, “Are luxury hotel properties delivering a lower quality of service to their guests than two-star hotels? Of course not, but guests of five-star hotels have very different expectations than those of two-star accommodations,” says Douglas Quinby, senior director, research at PhoCusWright.

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