Hotel development in the economy sector is still churning along, according to an article from HotelNewsNow.com’s John Walsh.
China and India are particularly ripe for expansion. India, for example, has just 115,000 guestrooms for a population exceeding 1 billion, and China has 1.6 million guestrooms for a total population of 1 billion.
“Southeast Asia has a population of 600 million-plus,” said Mark Lankester, CEO of Tune Hotels.com. “India is in excess of a billion people, and China is heading towards 1.5 billion. Call them emerging markets, call them developing markets, but they’re the most exciting consumer markets globally.”
• Read “Economy hotels seek global footprint.”
Total fees and surcharges collected by the hotel industry declined for the first time in seven years in 2009, but are forecast to rise again in 2010, according to Bjorn Hanson, Ph.D., clinical associate professor at the NYU Tisch Center for Hospitality, Tourism and Sports Management.
Fees and surcharges collected by hotels are expected to total US$1.7 billion this year, which would be a 9.7-percent increase compared to 2009.
“The forecast 2010 increase in total fees and surcharges is based on an expectation of 3 to 4 percent more occupied rooms and more aggressive implementation, enforcement and pricing of fees and surcharges,” Hanson writes in the report.
• Read “Hotel fees, surcharges to increase in 2010.”
Recent flooding in Nashville, Tennessee, caused the closing of seven hotels comprising 3,920 rooms, according to Hendersonville, Tennessee-based STR.
This represents 11 percent of the total room inventory, according to Bobby Bowers, senior VP—operations for STR. Despite the extensive damage publicized at the 2,881-room Gaylord Opryland Resort and a prolonged closing there, most of the hotels should be back online much sooner.
Another four hotels are remaining open with confirmed flood damage.
Nonfarm private employment increased 32,000 from March to April 2010 on a seasonally adjusted basis, according to the ADP National Employment Report. The estimated change in employment from February to March 2010 was revised up from a decline of 23,000 to an increase of 19,000.
Additionally, the revised estimate of the monthly change in employment from January to February 2010 shows a modest increase of 3,000; thus, employment has increased three consecutive months. The slow pace of improvement from February through April is consistent with the pause in the decline of initial unemployment claims that occurred during the winter months.
April’s ADP Report estimates nonfarm private employment in the service-providing sector rose by 50,000, the third consecutive monthly increase. Employment in the goods-producing sector declined 18,000 during April. However, while construction employment dropped 49,000, manufacturing employment rose 29,000, the third consecutive monthly increase.
More flexible contracts that allow owners to break deals with nonperforming operators are vital to keep the hospitality industry thriving, according to Michael Scully, CEO of First & Foremost and managing director of Hospitality at Seven Tides, as reported by the Khaleej Times.
Speaking at the Arabian Hotel Investment Conference on Monday, Scully said difficulty raising capital is putting more pressure on properties to perform.
“… It is imperative owners are able to get out of contracts with nonperforming operators,” he said. “Previous contracts gave the operator the upper hand in negotiations and performed due to the economy rather than their expertise. … they do not necessarily have the database of clients or sales expertise to achieve the maximum from these hotels, and owners must be in a position to move to experts in a particular market segment, whether it be business or leisure …”
Compiled by John Walsh, Stacey Higgins and Shawn A. Turner.