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5 things to know: 15 March 2012
March 15 2012

• Look-to-book ratios becoming unsustainable
• Upper-upscale tops US hotel performance
• New survey reveals guest loyalty by brand
• Fairmont San Francisco sold for $200m
• Fuel costs will not greatly impact hotel demand

Look-to-book ratios—which measure the number of information requests made to a central reservation system for every actual conversion—are at record highs, according to Pegasus Solutions. In January, the look-to-book ratio measured by Pegasus was 4,500-to-1, meaning travelers made 4,500 information requests for each booking processed.

That could spell trouble for hotel CRS systems, reports’s Jason Q. Freed. As the number of information requests increase, hotel CRS systems can have trouble keeping up, meaning your hotel might not show up in a traveler’s search results.

“The direction we’re heading isn’t sustainable,” said David Sjolander, VP of product management, distribution for Pegasus. “More and more, the CRS systems just can’t handle this traffic. They weren’t designed for it; hotels just keep throwing hardware at it.”

The U.S. upper-upscale segment ended the week of 4-10 March with the largest increases in average daily rate and revenue per available room, according to data from STR, parent company of 

The segment’s ADR was up 4.5% to $155.71 and its RevPAR increased 6.6% to $114.53. Upper-upscale hotels also reported an average 2% occupancy increase to 73.6%.

Overall, the U.S. hotel industry reported increases in all three key performance metrics. Its occupancy was up 1.9% to 62.1%, its ADR increased 3.6% to $104.65 and its RevPAR was up 5.5% to $64.95.

“Brand advocate” is being used more and more as hotel marketers fight to win the hearts (and wallets) of guests. Typically, the quality is measured by asking one simple question: “How likely is it that you would recommend (Company X) to a friend or colleague?”

A new survey conducted by Satmetrix did just that, asking 30,000 U.S. consumers whether they would recommend certain hotel brands to their peers. Marriott International (56%) and Hilton Worldwide (55%) led with scores more than 60 points ahead of sector laggard Motel 6.

Among the travel websites profiled this year, only TripAdvisor showed a significant differential in its experience, benefitting from its unique hub of consumer reviews combined with travel booking functions to garner a score of 33%.

Maritz, Wolff & Company and Saudi billionaire Prince Alwaleed bin Talal agreed to sell the Fairmont San Francisco hotel after failing to win permission to convert part of the property into residences, Bloomberg reports.

Woodridge Capital Partners LLC, a Los Angeles-based real-estate developer and investor, will pay approximately $200 million for the hotel, said Heather Turner, VP of acquisitions at Maritz Wolff. Woodridge will work with Howard Marks’s Oaktree Capital Management LP, also based in Los Angeles, on the purchase. Fairmont Hotels & Resorts will remain the property’s manager.

The 591-room luxury hotel in San Francisco’s Nob Hill neighborhood was put up for sale in June as part of a Maritz Wolff plan to cut the size of its portfolio.

Don’t expect rising fuel costs to have a negative impact at your hotel, writes Shawn A. Turner in a new blog.

According to analyses done by STR’s Jan Freitag, oil prices have no correlation to hotel demand. Thus, he doesn’t expect the recent spike to heavily impact travel. “Are you really going to tell your kids that we’re not going to Disneyland because the cost (for a roundtrip) went up by $40? No, we’re not going to say this,” he said.

Speaking of correlations between costs and fuel prices, the U.S. Federal Aviation Administration last week released a report forecasting shrinking capacity and skyrocketing airfares as oil prices continue to accelerate.

The nation's airlines buy approximately 48 million gallons of fuel each day at a price that jumped nearly 40% in the last year, reports the Los Angeles Times. A gallon of jet fuel sold for an average of $3 in 2011, up from $2.15 in 2010. And although airlines are flying more energy-efficient planes, fuel represents about 35% of the industry's total operating costs.

Compiled by Patrick Mayock.

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