• Report: Fraud rampant in hotel industry
• STR preliminary numbers: Strong January for US hotels
• Las Vegas rates up 10.7% in 2011
• Travelocity: 76% of consumers plan to spend more at hotels
• TripAdvisor’s earnings strong; Expedia misses estimates
The U.K. hotel industry lost approximately £2 billion (US$3.2 billion) to fraud during 2011, based on a conservative estimate from PKF (UK) LLP, reports HotelNewsNow.com’s Patrick Mayock in this week’s edition of “Checking out.”
The reasons for the losses are many, as are the solutions to create better fraud resistance throughout the sector, according to PKF’s “The Resilience to Fraud of the UK Hotel Sector.” One of the report’s authors, Jim Gee, shared three of the latter:
• Create a strong, anti-fraud culture where customers and employees know their role in helping protect their company.
• Make sanctions clear and public.
• When fraud does happen, it’s not enough to identify and prosecute the individual; you must also indentify and fix the weakness in your system that allowed that fraud to happen in the first place.
On a related note, the co-owner of Hotel Indigo in Nashville, Tennessee, was indicted by a federal grand jury this week on conspiracy, fraud and money laundering charges, according to a report in The Tennessean.
According to the indictment, David Mark Lineberry and Delaina Thompson are accused of defrauding Branch Banking and Trust Company and Fidelity National Title Insurance Company out of a combined US$9.3 million. Lineberry’s attorney, David Raybin, told the newspaper that his client cooperated with the investigation and is innocent of the charges.
The 12-count indictment “alleges that from about January 2008 to September 2011, Lineberry and Thompson conspired to commit bank fraud and wire fraud in connection with a loan obtained from Branch Banking and Trust Co. for the purpose of constructing a Hotel Indigo in downtown Nashville,” Assistant U.S. Attorney Byron Jones said.
STR’s preliminary performance numbers for January reveal another strong month for the U.S. hotel industry. Occupancy overall was up between 3% to 5% while revenue per available room was up 7% to 9%.
Luxury hotels recorded the largest year-over-year increases among the chain scales. The segment’s occupancy increased between 5% and 7%, and its RevPAR rose between 8% and 10%.
Hoteliers in Las Vegas appear to be capitalizing on the economic recovery by gaining pricing power.
According to the Las Vegas Convention and Visitors Authority, average daily rate in Las Vegas was US$105.11 for the full year 2011, up 10.7% over 2010. These rate gains come after modest occupancy gains of 3.4% to 83.8% for the year.
Room inventory in Las Vegas showed even milder growth, up 0.8%. There was a total 150,161 hotel rooms in Las Vegas as of 31 December.
Interesting to note: Weekend occupancy in Las Vegas was reported at 90.9% for the full year 2011 while midweek occupancy was reported at 80.7%, according to the LVCVA.
Travelocity's annual “Traveler Confidence Report” reveals a majority of consumers (53%), plan to travel more in 2012 than they did in 2011 despite a lack of confidence in the state of the economy. This is an 18 percentage point year-over-year increase from 2011. Of those respondents who planned on increasing their travel this year, approximately two-thirds plan to increase their travel budget in 2012, while slightly more than one-third will travel more without allocating more dollars to travel, indicating they plan to stretch their dollars further.
This year, 76% of respondents plan to spend the same or increase their hotel spending to account for hotel rate increases, taking more trips and planning longer hotel stays. What respondents won't be spending money on are hotel services or amenities—they are highly unlikely to pay for offerings such as maid service, newspapers or personal check-in. One hotel trend lives on: the staycation. Similar to last year, a little more than one-third of respondents said they were likely to book a hotel near home for a short getaway in the next six months.
All appears to be going well for TripAdvisor in its much-publicized spinoff from parent company, Expedia. The review site posted fourth quarter revenues of US$137.8 million, a 30% increase over the same period in 2010, according to the company’s earnings release. Full-year 2011 revenues were US$637.1 million, a 31% increase over 2010.
Expedia, on the other hand, missed Wall Street estimates with its quarterly earnings. The Bellevue, Washington-based online-travel agency said it earned 58 cents a share excluding options expenses, amortization and other items, unchanged from 58 cents in the year-earlier quarter and 5 cents above the 53-cent average estimate of 24 analysts polled by Thomson Reuters.
Sales rose 7% to US$787.1 million, but analysts were expecting US$812.4 million. Expedia shares were down 5% in after-hours trading Thursday.
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