Monday, April 19, 2010

“Hotels take retail cue with blue light specials” plus 3 more

“Hotels take retail cue with blue light specials” plus 3 more

Hotels take retail cue with blue light specials

Posted: 19 Apr 2010 12:26 AM PDT

(04-19) 04:00 PDT Los Angeles --

Free breakfasts don't cut it anymore.

The nation's hotels, still in the grip of an economic downturn, are borrowing the sales strategies from the nation's retailers to woo overnight guests.

If you liked Kmart's "blue light specials," you might like the limited-time bargains offered by Hilton Hotels, among others.

Superstore Beverages & More throws an annual 5-cent sale, but the national hotel chain of Red Roof Inn recently launched a 1-cent sale.

Fans of high-end clothier Barneys New York clamor for its "private sales." But you can also get in on private sales offered by hotels like the Le Parc Suite Hotel in West Hollywood.

To get through the rough times, hotel managers around the globe are relying on as many as five or more tactics to lure guests, according to a survey released last month by Cornell Nanyang Institute of Hospitality Management.

"There is no question that it's because of the economy," said Robert Gilbert, president of the Hospitality Sales and Marketing Association International, a trade group for sales and marketing professionals in the industry. "We are trying to backfill all of the vacancies."

Hotel guests who get in on these special sales can save as much as 60 percent on rooms, proprietors say.

Jeanae DuBois, a marketing executive from Fresno, booked a hotel in San Francisco for $44 a night through a limited-time sale posted on the Internet to a select group of fans of the Joie de Vivre hotel chain. The rooms normally rent for more than $120 a night.

"These amazing rates are providing me the opportunity to live out my goal of making 2010 my year of travel," DuBois said.

Hotel promotions are nothing new, but hospitality experts say the variety of promotions and the extreme discounts reflect the desperation of an industry that is struggling through one of the worst slumps in nearly a decade.

Among the most popular tactics used by hotel managers are room discounts, extra night's stays and value-added packages that include spa treatments, parking and meals, according to the Cornell survey.

Hotels are also using social media more often to draw in customers, the survey said.

"Whenever there is a big drop-off for hotels, we use any and all mechanisms to drive business," said Clem Bason, president of Hotwire.com, the online hotel booking site that discounts room rates by providing the names of the hotels only after guests reserve a room.

There is good reason for hotels to pull out all the stops.

The average occupancy rate in U.S. hotels in 2009 was about 56 percent, the lowest it has been in more than 20 years - even lower than the average during the travel-wary days after the terrorist attacks of Sept. 11, 2001.

Revenue per room has dropped even more, leaving hotel owners across the country struggling to pay their mortgages.

To lure guests, many hotels still rely on traditional sales strategies, such as offering a complimentary breakfast or an extra night free.

But industry experts say more cash-starved hotels are turning to promotional schemes heavily used in other industries, such as limited-time sales, private sales for select customers, last-minute bargains and discounts for booking nonrefundable rates.

There are also the bargain rates offered during private sales, limited to loyal customers and those who sign up for e-mail alerts via Twitter or Facebook.

The Red Roof Inn chain kicked off a 1-cent sale this month, but limited that price to only one room at each of the chain's 350 properties for each of the 15 days of the promotion.

The reason for such gimmicks is simple: Hotel managers stuck with empty rooms can't offer discounts to a few guests without infuriating the guests who are paying full price.

By relying on such promotional tactics, hotel managers can justify the discounts as special deals, offered only under limited circumstances.

This article appeared on page D - 3 of the San Francisco Chronicle

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Supervisors to consider marketing plan for tourism

Posted: 19 Apr 2010 10:44 PM PDT

The Santa Cruz County Board of Supervisors will consider a proposal today that would fund marketing projects aimed at attracting tourists through assessments paid by hotels and other lodging businesses.

County officials hope that establishing a so-called Tourism Marketing District will breathe life into the local vacation industry, which has seen a decline of more than 10 percent in hotel occupancy rates since the economic downturn began, amounting to a loss of about $2 million countywide, according to information provided by the county.

If marketing efforts are successful, it will also increase tax revenues sorely needed as agencies across the county trim their budgets.

Under the plan, hotels, lodges and other businesses with between six and 29 rooms would pay $1 per occupied room per night, while larger ones would pay $1.50 per room per night.

For the complete article see the 04-20-2010 issue.



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Moody's raises lodging, cruise sector outlooks

Posted: 19 Apr 2010 10:29 AM PDT

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NEW YORK (AP) -- Moody's Investors Service raised its outlook for the lodging and cruise sectors on Monday, citing more stable credit conditions.

Hotels and cruise lines have struggled during the recession as consumers cut back drastically on nonessential spending.

That trend, Moody's said, appears to be easing.

Moody's lifted its outlook for the sectors to stable from negative. The ratings agency anticipates fundamental credit conditions will be "generally stable" over the next year to 18 months.

Marriott International Inc. reported earlier this year that it had returned a fourth-quarter profit, but that even with more people staying at hotels, room rates have lagged. Its shares fell 49 cents to $33.39 in afternoon trading, while shares of Starwood Hotels & Resorts Worldwide Inc. shed 96 cents to $47.33.

Carnival Corp., the cruise operator, said last month that profits fell 33 percent, partly due to surging fuel costs, but that revenue climbed 8 percent. And the prices passengers paid for their cruise vacations climbed 17 percent.

Shares of Carnival dropped 55 cents to $38.42 and shares of Royal Caribbean Cruises Ltd. slipped $1.01 to $33.52.

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The Chartres Lodging Group, LLC, Joins the Center for Real Estate Finance Industry Fellows Program

Posted: 19 Apr 2010 01:29 AM PDT

"Chartres Lodging brings a tremendous amount of real estate expertise to the Industry Fellows program. Our faculty, students, and other Industry Fellows will all benefit from this new partnership," said Jan deRoos, the HVS International Professor of Finance and Real Estate and executive director of CREF.

Rob Kline, the firm's co-founder and president, will represent the company at meetings of the CREF Industry Fellows. Kline, a graduate of the School of Hotel Administration, has more than 20 years of experience in the lodging industry and is also co-chairman of Kokua Hospitality, LLC, a property management company focused on hotels undergoing transitional repositioning. Prior to forming Chartres Lodging, Kline founded the Lodging Business for Lend Lease Real Estate Investments and was the founding head of acquisitions for Strategic Hotel Capital.

"New research and the exchange of information are critical components of growth and success in the lodging industry," said Kline. "Through the CREF Industry Fellows program, we'll work with faculty at the School of Hotel Administration to address the challenges and questions that face the industry today."

The Industry Fellows program is the cornerstone of CREF's outreach efforts. The program helps fund the annual Cornell Real Estate Case Competition, seminars on current industry topics, student travel to real estate investment conferences, as well as faculty research. The first meeting of the Industry Fellows was held in January during the Americas Lodging Investment Summit in San Diego.

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