With the new year comes new opportunities. Here is my wish list for the global hotel industry for 2012:
Insights into profit per channel
For the longest time STR, parent company of HotelNewsNow.com, has beaten the drum about increasing average daily rate in a demand-rich environment. Obviously, the change in rate normally is not accomplished by actually changing or increasing a rate, it is accomplished by opening or closing room rates in their respective channel, be it global distribution system, central reservation system, online travel agency or otherwise.
With the release of the Distribution Channel Study for the first time the industry can get a sense for industry-wide ADR by channel. Eventually—and maybe more importantly—this data will be available by competitive set. Then this ADR can be put into the proper perspective as ultimately the channel’s ADR does not count as much as the channel’s profitability.
My wish is that in 2012 more hoteliers and revenue managers understand what they are gaining and what they are giving up when they allocate inventory to a specific channel.
More aggressive group room rate negotiations
Throughout 2011, we have watched the group rate, as reported in our segmentation program, grow albeit slowly. For the first 10 months of 2010, the group room rate was US$144; through October of this year it was US$147, an increase of 2%. Compare that to the 4.5% increase in transient ADR. I am afraid that when the group rooms are consumed throughout 2012, revenue managers will realize they left some revenue opportunity unrealized. In other words, group rooms for 2012 were not necessarily negotiated from a position of strength.
I wish directors of sales and their staff the ability to negotiate rooms for late 2012 and 2013 from a position of strength, especially given that absolute room occupancies continued to grow in the past few years and likely will be higher in the upcoming years, as well.
More staff in U.S. embassies
Foreigners want to visit the United States. But how do you easily increase the number of visitors? The American Hotel & Lodging Association and U.S. Travel Association are proposing part of the answer: Increase the number of embassy and consulate staff to expedite visa applications. If this is done, chances are foreign travelers will stay in U.S. hotels. Allowing more foreign travelers access to the country will increase occupancy, create jobs, bring in revenues and decrease the trade deficit.
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I wish the U.S. Department of State the money and resources to staff all open consular posts, and I wish the United States a powerful media campaign to show off all the tourist attractions the country has to offer to stimulate travel.
Continued demand growth
The 2011 demand numbers are coming in loud and clear: People are traveling, and the annualized number of rooms sold is now higher than it has ever been. It seems the worldwide stock market gyrations and the European debt crisis hasn’t quelled travel in the United States, at least.
I wish brand and hotel managers will trust those strong numbers, and I wish corporate-travel managers and leisure travelers will continue to do what they so ably did in 2011: book rooms.
More technology
One of the more memorable comments I heard during the Global Business Travel Association Convention in Denver this August was from a Fortune 500 travel manager who emphatically told me that her biggest desire was for her road warriors to bypass the front desk. She knows the technology is there, she just wants it deployed globally so her harried travelers can find their way upstairs without standing in yet another line, no matter if they are in Berlin, Boston or Beirut. A wide swath of in-room technologies supposedly make the hotel stay easier, more comfortable and more profitable are ready to be implemented. Of course testing, rolling out, adopting and then monetizing new technology is tricky and probably will become harder, not easier.
I wish IT managers the courage to deploy new systems when it makes sense, the serenity to accept that sometimes they do not and the wisdom to know the difference.
Less technology
On the flip side, isn’t it true that the more memorable stays are made when a personal interaction delights you? At times, relying on technology can be a barrier more than a catalyst. Personal service was, is and will always be the hallmark of the hotel industry. A personal word or a helpful hand often has turned a small or large disaster into a story that will live on as a glowing review forever.
I wish travelers and especially those of us who, like me, spend 100-plus nights away from home, well-trained staff in all their stays and a front-desk person who, when you approach, simply says: “Welcome!”
So, dear reader: What do you wish for your hotel or the hotel industry in 2012? And no, you probably can’t have a pony.
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