Hoping to secure hotel rates that will help your attendees save money at your next meeting? That might be challenging. Major chains released their first quarter earnings results last week, and it looks like the hotel industry is poised to benefit from positive feelings in the for-profit world.
“We see corporate customers who are not throwing caution to the wind by any stretch but are prepared to invest in their business and do the things that can be accomplished through meetings,” Arne Sorenson, CEO, Marriott, said on the company’s earnings call.
That investment is paying off for Marriott where average group room rates increased by three percent and year-over-year group catering spending rose by 11 percent. The chain is even taking proactive steps to reduce its dependency on government business, which has had plenty of problems over the past few years due to federal budget bickering in Congress. Carl Berquist, CFO, Marriott, said the hotel is intentionally reducing government occupancy to reap the rewards of higher demand and higher profit potential among leisure and group guests.
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At Hyatt, group revenues increased by nine percent, and the chain cited increased corporate dollars as a primary reason for a positive forecast.
“Corporate groups are bringing more spend into their meetings,” Mark Hoplamazian, CEO, Hyatt, said on the chain’s earnings call. “As this continues, we expect to see more rate movement.”
That movement will most likely be in only one direction: up.
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The most recent data from PKF Hospitality Research indicates that the hotel industry is on pace to return to pre-recession levels of profitability. In 2013, profits at convention hotels grew by 8.2 percent, and the future is looking even brighter for suppliers.
“Hotel profits, in inflation-adjusted terms, will exceed 2007 levels in 2015,” R. Mark Woodworth, President, PKF-HR, says.
While association and corporate planners alike may worry that all of these figures will create trouble for their meetings, it’s important to remember that flexibility can pave the way toward a more favorable contract. Occupancy rates at hotels can vary greatly depending on location and timing. Meeting planners who can consider alternate dates, destinations and properties will put themselves in positions to offer attendees more affordable accommodations.
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