While hoteliers during this week’s Hunter Hotel Investment Conference said economic factors aren’t likely to upset the continued rise of hotel performance, one economist suggested otherwise.
Hoteliers should take news of lower unemployment rates and rising consumer confidence with a grain of salt, according to Economist Rajeev Dhawan. While the economy continues to show signs of improvement and the hotel industry has so far dodged bullets from high oil prices, hoteliers need to keep a close eye on the headlines, he said.
“Some people think that we are on the acceleration path. The answer is no. It’s just the headwinds have become less,” said Dhawan, director of the Economic Forecasting Center and professor at Georgia State University.
However, hotel leaders during a general session said macroeconomic and political uncertainty should not cause hoteliers to lose sleep.
This is not a time for caution within the hotel industry, said Liam Brown, chief officer, owner and franchise services at Marriott International. Demand is strong and supply is low.
“It’s time to be aggressive and take advantage of the opportunity,” he said.
In 2011, roomnights booked through hotel websites grew consistently during each quarter, increasing 6.8% in the fourth quarter compared to the same time in 2010, according to data from the Fourth Quarter 2011 TravelClick North American Distribution Review.
In the fourth quarter, other distribution channels experiencing growth in the transient segment include online-travel agencies and global distribution systems used by travel agents, up 5.7% and 2.8%, respectively.
Other highlights from the study include:
• OTAs accounted for 11.4% of all hotel rooms booked.
• GDS accounted for 19.3%.
• Direct bookings—calling, emailing or walking into a hotel—accounted for 25%.
• Average daily rate growth across all channels was strong, up 3.8% when compared with 2010.
In the fast-paced world of digital sales, hoteliers must address content, design and speed of communication if they want to stay ahead, reports HotelNewNow.com correspondent Lisa Francesca Nand from the Travel Technology Initiative’s Optimising Digital Sales conference in London this week.
Hotel marketers are getting a lot better at the visual process of creating a Web page, said Jonathan Greensted, business development director at Zolv, a company that specializes in software design for online travel applications. The same parties still have some work to do in terms of sales conversions.
“Sales velocity is critical. It is all about sale conversion. If you build that excitement and velocity throughout the sales funnel, people are less likely to jump off that path and go with someone else. If people browse your website, and you have their contact details, why not send them a message the next day with some information about what they might be interested in?” he asked.
Hotel technology experts at a recent conference said a good Internet connection in a hotel room is more important than breakfast for many guests, according to an article on HotelierMiddleEast.com.
“When I joined the hotel industry 12 years ago, I was told that it’s a ‘bed, bath and breakfast business,’ but now it’s a ‘bed, bath, breakfast and internet business,’ and for many guests, Internet’s probably more important than breakfast,” said Nick Price, CEO of Netsys Technology and former CIO with Mandarin Oriental.
Price said that offering a “good” Internet connection in a hotel room is better than offering a free one, adding that most hotels only offered a bad-but-free connection or a paid, good connection. He said hoteliers often imagined Internet usage in hotels as business travelers on their laptops, but the reality of usage is much broader.
“It’s an explosion of usage happening right before us, and we have to respond to it in an intelligent way,” he said.
As Wall Street increases lending, UBS and Barclays are preparing a commercial-mortgage deal linked to several hotels, according to Bloomberg.
The largest loan in the bond offering is $120 million in debt tied to fees associated with a parcel of land in New York’s Chelsea neighborhood where the 316-room Dream Downtown stands, according to a regulatory filing.
Demand for securities tied to everything from suburban strip malls to luxury hotels is surging as investors wager that with unemployment at its lowest level since February 2009 commercial-property owners will be able to cover their mortgage payments.
New York isn’t the only beneficiary of renewed lending on Wall Street. A $65.7-million loan on the Hilton Downtown Nashville in Tennessee and $94.7 million of debt on the Civic Opera House in Chicago are included in the pool of securities from UBS and Barclays.
Wall Street banks arranged about $28 billion of commercial-mortgage backed securities last year, compared with $11.5 billion in 2010. Rising sales are a boon for property owners with loans coming due. Borrowers have $51 billion of mortgages packaged into securities maturing this year, according to Bank of America Merrill Lynch data.
Compiled by Jason Q. Freed.