North America: Rate Increases Remainder of 2012
+5.4% Committed occupancy
Upcoming three quarters
+3.9% Committed occupancy
Demand and Average Daily Rate Increases
- Committed occupancy for the remainder of 2012 is up 5.4 percent, and average daily rate (ADR) is up 5 percent. Growth is driven by individual business and leisure travelers, with an occupancy increase of 5.6 percent and an ADR increase of 5.5 percent in comparison to the same time last year.
- For the upcoming three quarters (to July 2013), committed occupancy is up 3.9 percent and ADR is up 4.3 percent, based on reservations on the books in comparison to the previous year. Occupancy growth is driven by the group segment with an increase of 4.6 percent, while the transient segment shows an increase of 3 percent. However, the transient segment leads the increase in ADR - up 5.3 percent compared to 2 percent for the group segment.
SOURCE: August 2012 TravelClick North American Hospitality Review, travelclick.com
U.S. Hotel Fees and Surcharges
- U.S. hotels will collect an estimated $1.95 billion in revenue this year from fees and surcharges, compared to $1.85 billion last year.
- Common charges include resort or amenity fees, early departure fees, early reservation-cancellation fees, Internet fees, phone-call surcharges, business-center fees (charges for receiving faxes and sending/receiving overnight packages), room-service delivery surcharges, minibar-restocking fees, charges for in-room safes, and automatic gratuities and surcharges.
SOURCE: Bjorn Hanson, divisional dean at the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University, convn.org/hanson-surcharges
Capital Expenditures on the Upswing
The U.S. forecast for 2013 is for capital expenditures of approximately $5 billion, a 33-percent increase over 2011’s $3.75 billion - but still 10 percent below the $5.5 billion in capital expenditures for U.S. hotels in 2008. The forecast reflects several factors, including that occupancy will recover to its highest level since 2007, and that average daily rate will increase the most since 2007. Capital expenditures do not include spending for hotel expansions or major changes, but include improved guest amenities and services, such as:
- in-room iPads
- guest-room design, including workspaces, radio-alarm clocks, and sound systems (many are MP3 compatible), seating, bathrooms, and lighting
- beds and bedding
- high-speed Internet access
- flat-screen TVs
- in-room amenities including irons/ ironing boards, and coffee makers
- guest services and conveniences, including enhanced complimentary breakfasts, check-in/check-out kiosks, and expanded business centers
- redesigned lobbies
- reconceptualized restaurants, to appeal to Gen-Xers and Millennials
- added or enhanced fitness facilities
- added or enhanced technology for meeting rooms and ballrooms.
Guests have grown less satisfied with their hotel stays, according to J.D. Power and Associates 2012 North America Hotel Guest Satisfaction Index Study. Among the results:
- Guest satisfaction declined to 757 on a 1,000-point scale, down 7 index points from 2011.
- Relatively high levels of satisfaction with cost and fees mask declines in other areas of the guest experience: Satisfaction with check-in/check-out; F&B; hotel services; and hotel facilities are at new lows since the 2006 study, and satisfaction with the guest room has declined within one point of its lowest level in the past seven years.
- Overall, 56 percent of hotel guests have a high opinion of staff;(B) 34 percent have an average opinion; and 10 percent have a low opinion.
- Fifty-five percent of guests use the Internet during their stay; 87 percent of those use Wi-Fi to connect. Among those who use the Internet, 11 percent were charged an additional fee to connect. Those that were charged a fee have an average costs and fees satisfaction of 76 index points lower than those guests not charged a fee.
- Guests who book through an online travel agency tend to be more price sensitive, have lower levels of satisfaction with their stay, are less loyal to hotel brands, and tend to report more problems, compared with guests who book through the hotel website or call the hotel or hotel brand directly.
On the Horizon: ‘Unlocking Creativity in Order to Unleash Productivity’
“There’s a real focus on collaboration and collaborative environments, not just within, but outside of traditional meeting space. It really speaks to the reality that meetings are now going well outside of the traditional meeting room and meeting space - and in many ways, kind of permeating the entire hotel, not just prefunction and the spaces off of the traditional ballroom space, but public spaces, lobbies, great rooms, and even what I call connective areas within the hotel - elevator lobbies and corridors.
“There’s a whole recognition of the value of these more informal kind of spontaneous connections between meeting participants who are trying to solve complex challenges. In terms of a philosophy, this notion of collaboration and bringing people together by cultivating connections is really something that is gaining traction with innovators within the meeting segment. From a facilities perspective, we are certainly recognizing that and building in a foundation and stage to allow those sort of informal collaborations within new builds as well as upcoming renovations - and we are seeing that among our competitors as well.
“There is an increasing focus on the approach to conducting meetings in terms of looking at how you can drive creativity, drive or improve innovation, and how you actually design your meetings to allow for a greater exchange of information, and to better leverage tools around collaboration that unlock creativity. I think that is key: Unlocking creativity in order to unleash productivity.”
Matthew Von Ertfelda
, Vice President of Insight, Strategy + Innovation, Marriott International
Coming Up: New Distribution Channels for Booking Hotels
- With Google Hotel Finder, Google is entering the distribution landscape.
- Apple has a patent for its yet-to-be- launched iHotel app.
- YouTube is considering adding travel to its “Merch” site.
- Facebook is still trying to enter the hotel distribution marketplace, despite early negative returns on its booking widget.
2011 Total Revenues
- Eighty-one percent of hotels experienced an increase in total revenue.
- Nearly 13 percent experienced an increase in net operating income.
- The cost to operate a hotel rose 4.3 percent - slightly above the 3.2 percent rate of inflation.
- A strong growth in profits is projected for 2013.
SOURCE: PKF Hospitality Research, pkfc.com
International Meetings Facts and Figures
- Average registration fee per delegate per meeting in 2011: $561 (down from $584 in 2010).
- Most popular subject for international meetings: medical science, followed by technology.
- North America has been the region with the largest average numbers of participants per meeting over the last decade, with an average 732 participants per meeting in 2011, followed by Latin America.
- The average number of participants per meeting reached its lowest point of the past decade in 2011, with 535 participants per international meeting, a drop of 36 participants per meeting compared to 2010.
- Estimated total number of participants of all 2011 meetings: 5.5 million-plus (compared to 5.4 million in 2010).
- Most popular month for association meetings: September, followed by June, October, and May.
- The smallest meeting size has become the biggest category since 2009: 30 percent of all the identified meetings that were organized in 2011 attracted between 50 and 149 participants - a growth of 11 percent over the past decade.
- The U.S. saw the biggest jump in the number of events held in 2011 over 2010, up by 136 meetings to a new record of 759.