Doug Shifflet played consumer myth buster at the American Hotel & Lodging Association’s Summer Summit last week in Phoenix.

The D.K. Shifflet & Associates Limited chairman and CEO’s findings should be noted by hotel owners and operators for shedding some light on consumer behavior. Among the “realities”:

• While macroeconomic issues are relevant, it’s the personal side that correlates to an increase in hotel demand, namely discretionary spending, according to Shifflet.
• Business demand anticipates the recovery, then slows, he said. Transient leisure demand, not transient business demand, is driving roomnights.
• The high income household bracket (US$150,000 annual income or higher) is a modest share of the luxury room nights with 12 percent of total roomnights. The majority of roomnights are attributed to the US$75,000 to US$150,000 income bracket, which means hotels might need to refocus their efforts; it’s not the super-rich driving the luxury segment.
• Baby boomers and Generation X travelers still dominate the market and will for years with an above-average income. Millennials, while receiving lots of media attention, are still a smaller but growing group.
  Hotel guests find extra fees (e.g. Internet charges, resort fees, parking fees) as annoying as bad beds. Shifflet pointed out that Southwest Airlines has gained market share since it began its Bags Fly Free campaign. “It’s a marketing issue,” he said. “But you need to find a way to give it to them.”
• When value is high, increase rates in small increments. Right now is the time to begin that process, Shifflet said. “If you increase at a modest rate, you keep your room rates.

Any of these points should provoke discussion among operations teams and revenue-management professionals. Please feel free to comment below!