Marketing Review — Fall 2008 - (Page 51)

HIGHER TRANSPORTATION COSTS AND A SLOWING U.S. ECONOMY SHIFTS HOTEL ROOM DEMAND This report covers trends in weekday/weekend demands by hotel sector, and percent market share of total rooms sold by hotels in the top 25 U.S. travel destinations, 2006–2008 [ ST E P H E N C . M O R S E , P H . D A N D C H A D D. C H U R C H ] I n the last three years, many factors have impacted U.S. travel and hotel room demand, including increased gas prices and airfares, and a slowing U.S. economy. Beginning in April 2006 when U.S. average gas prices reached $3 plus per gallon, and U.S. airfares increased sharply, higher transportation costs have had a growing influence on travel decisions by both business and leisure travelers. These factors have also influenced the demand for hotel rooms across the United States over the past three years. What sectors of the hotel industry (from the luxury sector to the economy/budget sectors) have gained or lost room demand in general, and weekday (business) and weekend (leisure) demand in particular since 2006 increases in transportation costs (gas, airfare) and a slowing U.S. economy? What sectors of the hotel industry have gained or lost market share of total rooms sold in the top 25 U.S. destinations over the 31month period from January 2006July 2008? This study is an analysis of these trends in six hotel sectors in the United States, and examines shifts in travel demand by hotel sector for business and leisure travelers using data from Smith Travel Research. This study only examines hotel room demand, and not hotel occupancy rates, ADR, or RevPAR by hotel sector or destinations. The emphasis of this study is total rooms sold, percent market share of total rooms sold by hotel sector, and rooms sold by weekday vs. weekend periods. Trends in Weekday (Business) vs. Weekend (Leisure) Demand Trends in business and leisure travel demand can be measured and analyzed by examining weekday vs. weekend demand for hotel rooms. Weekday demand measures room demand for the period Sunday – Thursdays and can be considered driven primarily by business travelers in most markets. Weekend demand measures room demand for the period Friday – Saturday and can be considered driven mostly by leisure travelers in most markets. Table 1 shows a sample of two measures of hotel room demand for the top 25 U.S. travel destinations from the period 2006 – July 2008: 1) the percent market share of total rooms sold by weekday (mostly business travel) vs. weekend demand (mostly leisure travel), and 2) number of total rooms sold on weekdays vs. weekends.8 51 sb10069047a-001/HeatH Korvola/getty images FALL 2008 • HSMAI MARKETING REVIEW

Table of Contents Feed for the Digital Edition of Marketing Review — Fall 2008

Marketing Review – Fall 2008 Contents The Online Marketer Success Stories Forecasting Trends Ian Schrager: The Revolutionary Man Leaving No Stone Unturned: The Quest for Ancillary Revenue Gaga Gadgets for Execs on the Go: Functional New Portable Technology to Make Life and Work on the Road More Hospitable Effectively Weathering the Ups and Downs of the Economic Cycle Experiments in Podcasting Higher Transportation Costs and a Slowing Economy Shift Hotel Room Demand

Marketing Review — Fall 2008

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