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DC hoteliers expect softer inauguration demand
December 12 2012

GMs in the Washington, D.C., market don’t expect to relive the record-setting attendance that coincided with President Obama’s 2009 inauguration.

Highlights
  • President Obama’s 2009 inauguration drew the largest attendance for any event in the history of Washington, D.C.
  • Hoteliers expect to sell out again this year, although they don’t anticipate as significant a rate premium.
  • Revenue managers are using employee prepayment and minimum-night-stay requirements to leverage demand.
By Patrick Mayock
Editor-in-Chief
patrick@hotelnewsnow.com

WASHINGTON, D.C.—President Obama’s incumbent inauguration will spark less fervor than his swearing in four years ago, but hoteliers in the Washington, D.C., area expect healthy performance gains nonetheless.

GMs in the market are projecting sell outs and significant rate increases for roomnights coinciding with the 21 January 2013 ceremony, which should provide a boost for what is traditionally a slower month for the District.

“There’s definitely activity for the inaugural dates. We are still projecting to be sold out,” said Pete Sams, GM of the 836-room Omni Shoreham.

Philip Wood
The Jefferson, Washington DC

Less than two miles away, the 96-room Jefferson, Washington DC is more than 50% booked for inauguration weekend with rate premiums of up to 90% compared with the same period in 2011, said Philip Wood, managing director.

“(Demand) is not as strong as I think we had anticipated. And that’s for the whole city,” he said. “But as we dig deeper, I don’t think there’s a state of too much alarm. It is not unusual for second-term presidents. It doesn’t have the excitement it would have with a new president coming into town.”

Indeed, President Obama’s second inauguration ceremony is unlikely to top the attendance of his first on 20 January 2009, an event that saw the largest attendance of any in the history of the city, according to the Joint Congressional Committee on Inaugural Ceremonies.

Occupancy was up 36.4% to 86.6% on 20 January 2009, the night of the last inauguration, according to data from STR, parent company of HotelNewsNow.com. Average daily rate saw a more significant increase of 108% to $336.62, while revenue per available room was up 183.6% to $291.53.

Forward-looking data from TravelClick shows rooms committed for 19-21 January are down 16% from the comparable period during the 2009 inauguration weekend, while ADR is down 11%.

Mark Jennings
GM of the Donovan House

“Obviously, it’s an incumbent inauguration. Those always have much less excitement about them and much less demand. The last inauguration was unprecedented. It will be different to repeat that at any time,” said Mark Jennings, GM of the Donovan House who also oversees operations at Kimpton Hotels & Restaurants’ seven other area hotels.

President George W. Bush’s incumbent inauguration on 20 January 2005 saw a RevPAR lift of 112% compared with the 231.6% RevPAR boost when he first swore his oath on 20 January 2001, according to STR data.

Looking forward, STR’s Washington, D.C., market forecast anticipates a 0.9% increase in occupancy to 49%, a 7.8% increase in ADR to $139.92 and an 8.8% increase in RevPAR to $68.52 for January 2013.

During January 2012, the market recorded an occupancy decrease of 1.1% to 48.6%, an ADR decrease of 2% to $129.65 and a RevPAR decrease of 3.1% to $62.99, according to STR.

Yield strategies
Revenue managers throughout the city are requiring minimum night stays and full prepayments to capitalize on the expected uptick in demand, sources said.

“Rates and rooms are at a premium in Washington, D.C., with the demand,” Sams said.

Pete Sams
Omni Shoreham

His Omni Shoreham previously required a three-night minimum stay but now have opened that up to two nights to help fuel more reservations. The hotel also requires prepayment at the time of booking.

“It’s important that our reservations are guaranteed,” Sams said.

The Donovan House is requiring three- and four-night minimum stays at present, Jennings said, noting that bookings have been slower to come in this year. However, he anticipates pace will pick up once the various ball and gala tickets are released throughout the city.

“It’s going a bit more slowly, but it will get there in the end,” he said.

And the Jefferson hotel has a four-night minimum stay and is “insisting on full prepayment and no cancellations,” Wood said.

“If you don’t do that, people will make multiple bookings and then cancel out at the last minute. If you get canceled out at the last minute, you don’t have a chance to fill those rooms,” he said.

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