Slight Comeback for Hotels


Travel professionals said room rates are stabilizing, though they remain below pre-recession levels.

According to Hotels.com’s twice-yearly price index released last week, room rates world-wide rose 2% in the second quarter of 2010 compared with the same period last year. In North America, the increase was 3%. The online lodging-booking site samples about 91,500 properties in more than 15,750 locations for the index.

David Roche, president of Hotels.com, an operating company of Expedia Inc., said the return of the business traveler is helping to keep rates firm. People are becoming more willing to spend money on hotel accommodation, he said.

Genevieve Shaw Brown, senior editor of travel-booking website Travelocity, a Sabre Holdings company, said the website’s summer domestic average daily rate was flat compared with summer last year. For the fall, that rate is 3.5% higher, as measured by current bookings for travel in the next few months. But compared to pre-recessionary 2008, the autumn rate is down 12%.

Ms. Brown said she thinks room rates are coming up off their lows. Of Travelocity’s top 100 hotel destinations, the biggest rate increases are to be found in New York, Cancun, Mexico, and Hong Kong, she said. The places experiencing the steepest declines are Tampa/St. Petersburg, Fla., Philadelphia and Houston.

Vijay Dandapani, president of New York City hotel operator and owner Apple Core Hotels, said that, year to date, his company has booked an average 25% increase in revenue per available room compared to 2009. Yet, compared to the same period in 2008, revenue is down about 20%.

Eric Pearson, chief marketing officer for the Americas at InterContinental Hotels Group, said meetings and corporate-group travel are returning, the first areas that pulled back during the recession. For IHG, global revenue per available room rose 4% in the first half, compared to last year. In July, the increase was 8%. IHG has more than 4,500 hotels around the world.

Tom Santora, chief marketing officer and senior vice president of sales at luxury Omni Hotels & Resorts, said the number of meetings bookings at his company is now at 2007 and early 2008 levels. Omni Hotels & Resorts has 47 hotels in North America, and about 75% to 80% of its business comes from corporate travel.

“It’s not about raising the rates, as it is managing the mix of business,” Mr. Santora said. The group plans to decrease the size and number of discounts it offers and return to trying to add services for guests to justify higher rates.

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