As we reach the mid-point of 2009, the question on the minds of most hoteliers is, “What will the remainder of the year hold?” The hotel industry has lived through a challenging six months. Occupancy rates have plummeted and average daily rates have been lacklustre. And as if things weren’t already tenuous, the emergence of the H1N1 flu compounded the situation, with many consumers questioning whether any kind of travel was wise.

While occupancy and ADR show continued lethargy, there appears to be good news on the development front. For example, according to STR/TWR Dodge Construction Pipeline Report for Canada, there are 224 projects and 25,793 rooms underway in the first quarter, as of March 2009. This represents a 3.6 per cent increase in the number of rooms in the pipeline compared to March 2008, a sharp contrast to the U.S. market, which recorded a 19.7 per cent decrease in the number of rooms in the total active pipeline versus April 2008.

With summer fast approaching, the consensus is that the upcoming season won’t be stellar, but new data has revealed that consumers are starting to show pent-up demand for travel. In the U.S., a Deloitte survey reports that 29 per cent of Americans planned on travelling during Memorial Day, which was up slightly from last year, and 64 per cent claim they’re planning a summer vacation as well. Cancellations also look to have bottomed out and bookings are beginning to rebound heading into 2010. However, many argue we haven’t seen bottom yet.

Regardless of what theory you subscribe to, one valuable lesson hoteliers have learned through the economic turmoil of the past year is that there’s no normal anymore. At the best of times, life in the hotel world is far from static, but these days, hotel companies need to get the most out of their employees, continually reinvent their product and evolve what they’re offering guests, themes clearly prevalent in this month’s issue.    

Hoteliers must focus on the new value-conscious traveller for the foreseeable future. Whether travelling on their own dime, or on the corporate expense account, guests are demanding more for less. Lean and mean will be the mantra for the next several years.

But let’s not lose sight of the fact that guests will always demand innovation and creativity from hoteliers. Whether it’s by providing new experiences, launching innovative product categories or implementing new technologies, the wow factor is crucial.

More than ever, hotel companies will need to work overtime to create new opportunities to drive sales and develop winning strategies. As Carol Verret of the U.S.-based Carol Verret & Associates said in a recent webcast on May 15, “This is an incredible opportunity for hotel sales and revenue managers to develop processes in alignment with this paradigm shift in the economy. There is a new economy emerging — how hotels plug into (it) will determine success.”        


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