3 Replies Latest reply: Apr 1, 2009 1:04 AM by tjcnewyork RSS

Challenges

Alumni Steward Platinum 8 Reviews
Currently Being Moderated

See

 

http://seekingalpha.com/article/128443-challenges-ahead-for-hotels

 

for a sobering review of the state of play in the lodging world.

  • Re: Challenges
    tjcnewyork Platinum
    Currently Being Moderated

    Quoting the article, "RevPAR decline of 12.3% during the week ended March 21 was comprised of a 4.7% decline in occupancy, and an 8.0% decline in average daily room rate (ADR)."*  The 8.0% decline in ADR is good for consumers.  Decreasing room rates packaged as e-Breaks, Pointsavers, AAA rates, Senior Citizen rates and Government rates is GOOD for the business and leisure travel community.  In the bigger picture, a sharper decrease in ADR might actually lower the % decline in occupancy. 

     

    For example, the AAA monthly magazine features road trip tips along with discount coupons for Oil Change, Brake Service, etc.  In February, the Oil Change offer was $29.95; in March it's $24.95.  On a hunch, postponing the oil change made sense, only to get a better offer for the same package of services.  Later in the week, the ten bucks saved may replace that rear window wiper blade on my SUV.

     

    Correspondingly, if a full-service Marriott reduced it's AAA rate let's say by $25, I might use the actual or perceived savings to splurge on buffet breakfast for 2 rather than many other breakfast options that are available for less. OR, what if Marriott offered 2 BF vouchers as an Arrival Gift? THAT, would work as an incentive, too. 

     

    * Challenges Ahead

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: Challenges
    Alumni Steward Platinum 8 Reviews
    Currently Being Moderated
    True but at some point ADR becomes problematic for larger hotels--and then other things slip, like the amenities that we've taken for granted.

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: Challenges
    tjcnewyork Platinum
    Currently Being Moderated
    Lowering ADR is not a panacea, it's a response to jumpstart travel in a very challenging marketplace. You have to have guests in order to deliver knock-your-socks-off service.  Exceptional service retains loyal customers, not lower room rates.  So among the challenges for Marriott is striking that balance to attract guests and deliver the service that compels them to come back.  Of course, lower ADR and headcount reduction can have an impact on guest-facing services but Marriott offers innovative solutions: 

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

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