Hospitality Asset Manager Insights on Rising Lodging Rates

Two news stories that we followed as part of our hospitality asset manager practice suggest hotel room rates will continue to rise even though gas and fuel prices are climbing as well. Here are a few excerpts on that commentary and our take on it: – The GBTA index says that business travel hit its highest level since the recession and prices are rising as demand grows. According to the article in HospitalityNewsNetwork.com “With economic improvement and more business travelers hitting the road, travel prices are also recovering from their sharp declines during the recession. Rate analysis based on an aggregate of airfare, lodging, meals, ground transportation and car rentals show travel prices in 2010 increased by 2.5 percent and are projected to increase between 2 percent to 4 percent for 2011.” Based on what we read between the lines here, if you are a hotel investment advisor, are that room rates will need to continue that growth for another 2 or 3 years to regain the RevPar that was experienced and lost subsequent to 2007. – Still, if your charge as a hospitality asset manager is to work with sales staff to increase meeting and convention business, expect global corporate travel managers to look for other ways to reduce overnight room costs. In this article published in Hotel Interactive, “American Express Global Business Travel studied the trend in new research released this week – Globalization: Is Your Travel Program Ready?” It states, another route to cost savings is through deciding when travel makes sense – and when it doesn’t. The North American section also showed 69 percent are supplementing face-to-face prospect and client meetings with web conferences and 41 percent said internal meetings are increasingly being conducted online.” Does your hotel feel the impact of online uses to conduct meetings and conferences by more and more corporate meeting planners? What has your hospitality asset manager proposed, if any, as a possible solution to circumvent this room night business and can you share it here for our readers??