How Profitable Will Your RevPAR Be In 2011?

(Hospitality Business News) As 2010 comes to a close, hotel owners and operators start to focus on the upcoming year and ask the question, “How much money will we make in 2011?”  Based on the December 2010 edition of Hotel Horizons®, Colliers PKF Hospitality Research (PKF-HR) is forecasting occupancy for the overall U.S. lodging industry to grow 2.2 percent in 2011, along with a 3.9 percent gain in average daily rate (ADR).  The net result is a 6.2 percent increase in RevPAR that should yield an 11.1 percent lift in the net operating income[1] (NOI) of the average U.S. hotel.

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Christmas Occupancy Down 16%

If 2010 was a year of rebuilding, 2011 is about sustaining occupancy and revenue growth. The industry is carrying a strong book of business into 2011, which will get the New Year off to a good start. Committed occupancy for the top 25 markets in North America for the current quarter and three future quarters is ahead of the same time last year by 6.7%. Group business continues to strengthen with group commitments for the next 12 months up 6.1% year-over-year. For the first quarter of 2011 they are up 7.0%. Group booking pace continues to improve, with new bookings added over the past month up 4.9% over the comparable period last year. Group ADR is behind by 2.2% year-over-year.

As has been the case for the past several months, transient demand continues to lead occupancy growth, with transient room nights ahead of the same time last year by 7.3%. Business demand (transient weekday retail and negotiated segments) in particular has been and remains very strong, with reserved room nights up 12.8% year-over-year. Transient leisure demand is growing as well, though at a far slower rate.

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Hotwire Reveals Canadian Hotel Rate Report for December 2010

SAN FRANCISCO, Dec. 22, 2010 - Hotwire.com®, a leading discount travel site, today announced the results of the December 2010 Hotwire® Canadian Hotel Rate Report, which features the top five cities in Canada where hotel rates have dropped the most. When combined with Hotwire’s already discounted prices, the Hotel Rate Report helps guide customers to the destinations that can maximize their travel dollars.

Halifax, Nova Scotia tops this month’s report again with a nine percent drop. Those looking for an escape from the extreme snow and wind found in most areas of Canada should head to this capital city, where the average minimum temperature is only -7 degrees C during the month of December.

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STR: US hotel results for November 2010

• The industry's occupancy rose 9.0 percent, ADR was up 2.5 percent, and RevPAR increased 11.8 percent in November.
• Among the Chain Scale segments, the Luxury segment experienced the largest ADR and RevPAR increases.
• Among the Top 25 Markets, New Orleans achieved the largest increases in all three key performance metrics.

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Hawaii hotel occupancy rates continue to rise

Hotel occupancy rates throughout Hawaii continued to rise compared with a year ago, while average room rates declined slightly, according to a report released Tuesday by Hospitality Advisors LLC.
The monthly analysis found that statewide hotel occupancy averaged almost 70.9 percent in October, an increase of 4.5 percentage points over the same month last year.

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Shanghai's Housing Rents, Hotel Rates Fall Up to 50% After World Expo Ends

Shanghai’s apartment rents and hotel room rates near the World Expo site fell as much as half as China’s biggest international event this year ended.

Rents on a two-bedroom apartment in the neighborhood, which fetched from 6,000 yuan ($900) to 10,000 yuan a month during the showcase that ended Oct. 31, have fallen 50 percent, said Chen Yi, manager of the Expo branch of Centaline Property Agency Ltd. Hotel rates declined as much as 47 percent last month from October, according to Qunar, China’s largest travel website tracking the city’s 2,000 hotels.

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Hotwire Reveals Hotel Rate Report for November 2010

SAN FRANCISCO, Nov. 22, 2010 /PRNewswire/ -- Hotwire.com®, a leading discount travel site, today announced the results of the November 2010 Hotwire® Hotel Rate Report. The report features the top five cities in North America where hotel rates have dropped the most and the top five cities where rates have experienced the biggest price increase. While one report guides customers to the destinations that will maximize their travel dollars, the other helps inform travelers when using Hotwire to save money will be even more essential.

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London hotel rates up 12.5%

Hoteliers in London achieved average room rates of 12.5% more in September compared to the same month in 2009.
According to research by PKF Hotel Consultancy services, the price of an average hotel room in London was £118.56 last month, up nearly £15 on September 2009.
Manchester hoteliers also saw a strong month, thanks to the Labour Party conference. Occupancy increased 5.4% to 82.2%, while rates rose 9.4% to £81.78.
The regions remained virtually static. The average room rate for September 2010 was £65.42, while in 2009 it was £65.45.
Robert Barnard, a partner at Hotel Consultancy Services, said the public spending review may have an effect on hoteliers in the near future, but added:
“The solid figures we have seen over the past few months are at least a good start point if there are to be further bumps in the road ahead."

Rates rise 11% in Nassau Bahamas

Hotels in Nassau/Paradise Island saw their average daily room rates increase by 11 per cent during the 2010 second quarter, but the Bahamas Hotel Association (BHA) president warned not to read too much into those figures, pointing out that this had been matched by cost increases with the sector currently in the middle of its traditionally weakest period.
Robert Sands told Tribune Business that when it came to assessing Bahamian industry performance it was impossible to "look at just one side of the scale", pointing out that besides costs, indicators such as average occupancy and total revenues also needed to be factored in.

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First ‘Hospitality Revenue Management Community’ in the UK officially launched by BAHA

(Hospitality Business News)

The evolving discipline of ‘Revenue Management’ and its proven effectiveness in the current difficult trading conditions is one of the most important developments in hospitality finance today. Last week BAHA – the UK’s leading educational organisation for professionals involved in financial management, revenue management and IT within the hospitality industry – officially launched the ‘BAHA Hospitality Revenue Management Community’ (HRMC) to provide a major forum for debate, education, and generally raising the profile of ‘Revenue Management’ within the UK hospitality profession.

Over 140 hospitality industry finance, revenue management and IT specialists gathered in London to attend last Thursday’s HRMC launch at the Holiday Inn London Kensington Forum Hotel and learn more about BAHA’s major new initiative; and have the added bonus of presentations from two distinguished guest speakers – Sarah Duignan, Director of Account Management at STR Global, on current Hotel Market trends and future projections, taken from the latest STR Global quarterly report and  Donna Taylor, Head of Accommodation at the London 2012 Olympic Organising Committee (LOCOG).

“The London 2012 Olympic and Paralympic Games is a huge opportunity for the hotel industry,” Donna Taylor told the BAHA HRMC launch audience. “LOCOG looks after what we call the Olympic family, which is made up of team officials, technical officials, National Olympic Committee executives and guests, international sporting federations, heads of Government or State and international media.  They will all need hotel accommodation and we have secured over 53,000 hotel rooms in London.  We are acquiring an efficient and effective central reservations system which will deliver a good end-to-end experience for all our clients to ensure they have an enjoyable stay in London.  We are working with Visit Britain and Visit London to maximise the Games experience.”

The newly created BAHA Hospitality Revenue Management Community will be headed up by a newly appointed HRMC Steering Committee – chaired by Heather Hart, Director, Rev Excel – and comprising leading practitioners in the field: BAHA Council Member Warren Mandelbaum, Revenue Management Specialist who was formerly Head of Revenue Management, Whitbread Hotels & Restaurants; Patricia Griffin, Regional Revenue Manager – Provincial, Travelodge; Jennifer Keen, Director, Total Revenue Solutions; Christopher Cooper, Head of Commercial at City Inn; Moz Shigdar, Group Revenue Manager, BDL Management;  Cheryl Hawksworth, Regional Sales Manager, IDeaS; Corinne Bellaby, Membership Secretary, AICR UK (The International Association for Deputy Managers and Front Office Managers of Luxury Hotels); Kate Varini, Senior Lecturer, Oxford Brookes University; and Debra Adams, Head of BAHA Education.

The BAHA HRMC and its Committee have been formed in response to industry demand and the growing importance of the developing practice of ‘Revenue Management’ within the UK hospitality industry. In straightforward terms, revenue management is a technique to optimise income revenue from a fixed, but perishable inventory. The challenge in hotels is to sell the right rooms to the right customer at the right time for the right price. The role of the revenue manager (RM) is evolving and developing. Basically the ‘RM’ is becoming more than being the link/middle-man, providing the relevant intelligence upon which intelligent decisions are made, between the finance and the sales and marketing departments – for instance, ‘RMs’ are also now becoming responsible for the accommodation revenue budget.

At the launch, Heather Hart and Jennifer Keen outlined the key aims of the BAHA HRMC:

·         To promote and develop practical applications in Revenue Management

·         To provide accredited educational programmes

·         To support all individuals engaged in the discipline of Revenue Management within the hospitality industry at any level

·         To become an industry voice for Revenue Management

·         To raise the profile, understanding and importance of Revenue Management

·         To create a community of knowledge, learning and experience

·         To establish a forum for debate, sharing, learning and progression

Heather Hart explained that the new BAHA HRMC Committee had been created to offer support and advice to any professionals who are in some way involved in the practice of Revenue Management within the hospitality industry. “We will help you answer any questions on Revenue Management you may have,” she said. “We’ll connect you with the right people to assist; we’ll provide circulation of industry data, articles and viewpoints; and we’ll provide the opportunities to meet with colleagues and contacts across the industry.” 

Commenting on the HRMC, BAHA Chief Executive Carl Weldon said: “We are delighted about the formation of the new BAHA HRMC and its managing Committee, which will be responsible for driving the Revenue Management agenda within BAHA.  At this early fragile stage in the nation’s economic recovery, the introduction of this major BAHA initiative is especially timely – driving a BAHA priority objective of providing a community for discussion and education about ‘Revenue Management’, whilst raising its profile, within the UK hospitality industry.

“BAHA will support Revenue Management through specific events and forums – devised and organised by the new HRMC Committee – where BAHA members and non-members alike can learn more through enhancing their knowledge and technique, with regard to all aspects of ‘best practice’ revenue management, whilst additionally benefiting from the knowledge shared. These events will also give our hospitality IT members and community generally, involved in developing the latest hospitality revenue management-related technology, the opportunity to come together with Revenue Managers (RMs) and industry leaders to discuss the implications of the latest techniques and required technological advances.

Indeed, BAHA will be dedicating a major expert session and a number of educational workshops to Revenue Management at the 5^th BAHA Annual Conference – to be held on Thursday, 25 November 2010, at the Sofitel Hotel, London Heathrow at Terminal 5. One of the highlights of the opening morning’s sessions will be ‘Revenue Management Question Time’ where the chairman’s hot seat will be taken by Michael Prager, Senior Vice President Sales Hilton Europe, Middle-East and Africa. He will present questions to a team of expert panellists – including: Heather Hart; Warren Mandelbaum; Moz Shigdar; Ciaran Fahy, Managing Director, The Cavendish London; and Fabian Specht, EMEA IDeaS.

It is BAHA’s aim to produce and promote introductory and other short courses and certification programmes for Revenue Management, while linking in with other educational sources. At the launch, a number of one- and two-day BAHA HRMC Training Modules, designed to build skills and confidence for Revenue Professionals,  were announced – including: ‘Introduction to Revenue Management’ (2-day); ‘Introduction to Leadership (2-days); ‘Food and Beverage Revenue Management’ (2-day); ‘Presentation Skills for RMs’ (1-day); ‘Excel for Revenue Managers’ (1-day); and ‘Coaching Skills’ (1-day).

BAHA currently provides the only industry specific hospitality finance education programme; and the Association has decided to produce – in association with a range of partners, including universities – a new second- and third -route through its Education and Training Programme, specifically for ‘RMs’. Recognising, as a matter of priority, the need to ensure that future hospitality ‘RMs’ possess the skills and knowledge to meet the demands of this key management function, BAHA is to offer an 18-month, three-stage part-time Revenue Management Education Programme, accredited by Oxford Brookes University – scheduled to commence in 2011. BAHA is presently in consultation with the hospitality profession and key UK revenue management organisations about the delivery and programme of funding for this initiative.

The aims of the Revenue Management Education programme are:

• To develop a career path for ‘RMs’ and Directors in the hospitality industry
• To formalise and develop the discipline of revenue management in the hospitality industry
• To develop sustainable long-term relationships between industry, academia and a relevant trade body to develop and disseminate ‘best practice’ in revenue management
• To create official certification levels by which employers can judge candidates applying for revenue management positions 

Are hotels ready for the dynamic pricing revolution?

Even though dynamic pricing was first introduced in the hotel industry by chains like Marriott, Hilton and InterContinental in the early 2000s, it seems we are only now starting to get onto the barricades in this hotel pricing revolution.


Just over a month ago, IHG announced at the National Business Travel Association convention that following the success of a test with dynamic pricing in Asia-Pacific over the summer, it now seeks global adoption of dynamic pricing.

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Hotwire Reveals Hotel Rate Report for September 2010

Hotwire Reveals Hotel Rate Report for September 2010

Canadian Cities Return to the List of Price Drops While New Orleans Tops List of Price Increases
SAN FRANCISCO, Sept. 14 - Hotwire.com®, a leading discount travel site, today announced the results of the September 2010 Hotwire® Hotel Rate Report. The report features the top five cities in North America where hotel rates have dropped the most and the top five cities where rates have experienced the biggest price increase. While one report guides customers to the destinations that will maximize their travel dollars, the other helps inform travelers where using Hotwire to save money will be even more essential.
Top Five Price Drops:

It’s been nearly a year since a Canadian city has appeared on the North American Hotel Rate Report, but this month Canada makes a strong return with two great cities. Calgary, still suffering from slow business traffic, tops the list with an eight percent drop while Vancouver comes in at number three with a three percent drop. As a major leisure destination, hoteliers in Vancouver are dropping rates to compensate for a slower than expected summer season.

Las Vegas holds onto the number five spot this month as new inventory comes online, adding more pricing competition in the city. This, coupled with their intensely hot summer season, continues to keep prices down.
When compared to the same time last year, the top five hotel price reductions for September 2010 include:

                Price     Example of a Current
  Rank   Hotel Market   Drops     Hotwire Deal, US$/Night
    1 Calgary, AB       - 8% 3-star             $99
    2 Madison, WI       - 4%  3.5-star           $69
    3 Vancouver, BC     - 3%  3.5-star           $91
      Salt Lake
    4   City, UT         - 2% 4-star             $83
    5 Las Vegas, NV     - 2% 4-star             $72
  Top Five Price Increases:

New Orleans hotel prices have the largest price increases this month with rates in the “Big Easy” rising by 22 percent. The city is seeing a huge boost in occupancy over last year due to a number of factors. Conventions are returning to town and attendance is up versus last year. In addition, hotels in the area are also filled with many workers who are dealing with the oil spill cleanup, providing those properties with consistent business. As a result, casual travelers are faced with higher rates.

As we expected last month, San Francisco and Toronto continue to make the list. This month San Francisco climbs to the number two spot with a 20 percent increase due to strong convention business. Meanwhile, Toronto drops two spots from last month coming in at number five with a 15 percent increase. Rate increases in Canada’s largest city are primarily driven by corporate visitors, who are flocking back to this financial hub.
When compared to the same time last year, the top five hotel price increases for September 2010 include:

                          Example of a
                Price       Current Hotwire
  Rank   Hotel Market   Increases   Deal, US$/Night
      New Orleans,
  1   LA               22% 4-star         $92
      San
      Francisco,
  2   CA               20% 3-star         $100
  3   Miami, FL           19% 4-star         $84
  4   Portland, OR         17%  3.5-star       $86
  5   Toronto, ON         15%  3.5-star       $90


“This month is a great time for travelers to visit some of the best leisure destinations in North America, especially those up North in Canada where prices are dropping to compensate for a slow summer,” said Clem Bason, President of the Hotwire Group. “As for destinations that are seeing price increases, consumers will have to be more vigilant to find good deals and should aim for weekend getaways when prices are generally lower due to the lack of business travelers.”

Over 1.8 million hotel rooms go unsold across North America every night. Hotwire is able to deliver great deals across all types of markets because it works with hotels, airlines, and car rental companies to fill unsold inventory.

About the Hotwire Hotel Rate Report
The Hotwire Hotel Rate Report will run results during the second week of each month. Results are calculated by looking at Hotwire stay dates for select regions in the current month, and comparing prices in the current month against Hotwire prices in the same month in the prior year. Prices are compared within the same star rating categories for consistency, and the percent change in price for each region is generated as an overall average of the changes in those categories. The prices in the charts above are examples for a particular star rating category within that market, and actual prices may be higher or lower than the example that is provided.

About Hotwire
Hotwire.com is a leading discount travel site with low rates on airline tickets, hotel rooms, rental cars, cruises and vacation packages. Launched in 2000, Hotwire negotiates deep discounts from its travel suppliers to help travelers book unsold airline seats, hotel rooms and rental cars. J.D. Power and Associates 2008 Independent Travel Web Site Satisfaction Study(SM) recognized Hotwire for ranking “Highest in Customer Satisfaction Among Independent Travel Web Sites, Three Years in a Row.” Hotwire is an operating company of Expedia, Inc. CST# 2053390-40. NST: 20003-0209. For more information, visit http://www.hotwire.com/.

The Impact of the Merchant Model on U.S. Hotel Profits

Back in December 2003, Smith Travel Research published a much discussed article titled, “The Billion Dollar Leak - The Impact of The Merchant Model on US Hotel Profits.” In this article the authors attempted to quantify the financial impact of third party sites on US hotel industry room revenues and profits. To describe this loss, they coined the term “leakage,” i.e. revenue "leaked" from the hotel industry to third party sites in the form of abnormally high merchant commissions of 25% and higher.

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STR: Luxury leads ADR, RevPAR monthly results

HENDERSONVILLE, Tennessee—The luxury segment reported the largest average-daily-rate and revenue-per-available-room increases among the chain-scale segment for July 2010, according to data from STR.

The segment’s ADR increased 6.6% to US$234.48 and its RevPAR jumped 14.5% to US$169.07.

The economy segment posted the largest occupancy increase, rising 7.6% to 62.3%, followed by the luxury and midscale-without-food-and-beverage segments, each with 7.4% increases to 72.1% and 69.3%, respectively.

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STR reports US Occupancy for July

HENDERSONVILLE, Tennessee—The U.S. hotel industry posted increases in all three key performance measurements during July 2010, according to data from STR.

In year-over-year measurements, the industry’s occupancy was up 7.0 percent to 67.9 percent. Average daily rate ended the month with a 1.3-percent increase to US$99.14. Revenue per available room for the month rose 8.5 percent to finish at US$67.35.

Among the Top 25 Markets, all but one market reported occupancy increases and 8 top markets reported double-digit increases. Detroit, Michigan, led the occupancy increases, rising 20.9 percent to 61.5 percent, followed by Oahu Island, Hawaii (+15.9 percent to 89.6 percent), and New Orleans, Louisiana (+13.1 percent to 72.6 percent). Phoenix, Arizona, posted the only occupancy decrease, falling 1.4 percent to 43.6 percent.

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Moscow Has Most Expensive Hotel Rates in World

Moscow retained its ranking as the city with the most expensive average hotel room rate in the world, a survey by business travel agency Hogg Robinson Group Plc showed.

The average rate in the city in the first half was 256.83 pounds ($407), Hogg Robinson said in a report on its website today. Geneva followed as the second-most expensive city at 199.11 pounds and Hong Kong at 197.61 pounds

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STR Global: Americas performance for June 2010

LONDON and HENDERSONVILLE, Tennessee—The Americas region recorded positive results in the three key performance metrics when reported in U.S. dollars for June 2010, according to data compiled by STR and STR Global.

The region’s occupancy rose 7.0 percent to 64.9 percent, average daily rate ended up 1.8 percent to US$100.31, and revenue per available room increased 8.9 percent to US$65.11.

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STR Global: Asia/Pacific results for June 2010

LONDON—Hotels in the Asia/Pacific region experienced increases in all three key performance metrics for June 2010 when reported in U.S. dollars, according to data compiled by STR Global.

In year-over-year measurements, the Asia/Pacific region’s occupancy rose 14.5 percent to 63.9 percent, average daily rate increased 10.8 percent to US$121.83, and revenue per available room jumped 27.0 percent to US$77.83.

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STR Global: Europe results for June 2010

“The first half of 2010 showed again a split across Europe in performance”, said Elizabeth Randall, managing director of STR Global. “Hotels in Western and Northern Europe led the way in ADR improvements (in Euro-terms), whilst Southern and Eastern European hotels struggled to convert the occupancy gains into improved ADR.

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STR Global: MEA results for June 2010

LONDON—The Middle East/Africa region reported favourable results in the three key performance measurements for June 2010 when reported in U.S. dollars, according to data compiled by STR Global.

The region’s occupancy rose 1.7 percent to 59.2 percent, average daily rate increased 14.3 percent to US$151.00, and revenue per available room grew 16.3 percent to US$89.37.

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