Hotel & Motel Management - May 19, 2008 - (Page 44)

44 News H&MM May 19, 2008 | HotelMotel.com www.HotelMotel.com/digital_edition Stimulus Continued from page 1 Jahn IHG Yesawich YPARTNERSHIP Tourism Institute at the University of Tennessee, Knoxville. “The money is there and travel budgets are going to increase.” Jahn and his former professor, Stephen Morse, economist and director of the Tourism Institute, studied the effects economic stimulus checks will have on the lodging industry. Starting this month, the U.S. Treasury will begin sending economic stimulus payments to more than 130 million households. Eligible people will receive up to $600 ($1,200 for married couples), and parents will receive an additional $300 for each eligible child younger than 17. “We looked at what happened in 2001 [the last economic stimulus rollout] and kept thinking to ourselves, ‘This is a lot more money, especially when you look at families.’” Jahn said. “We think this will be a positive inﬂuence.” Peter Yesawich, chairman and c.e.o. of YPartnership, touched on those issues when conducting his own research on the topic. Yesawich said the release of the checks at a time when people are making summer and fall vacation plans makes a lodging industry beneﬁt seem probable. “They’re right in the zone,” Yesawich said, referring to past booking patterns. “For a weekend trip—four nights or less—the lead time for reserving runs ﬁve to six weeks. And then for a long-form trip of ﬁve nights or more, the lead time runs 11 to 12 weeks. “If you take the range there, if we do see an impact, it will occur within 90 days.” Jahn speculated that because electronic ﬁlers receive the money before paper ﬁlers, the industry could see “two waves in distribution on how it’s going to be spent.” He outlined three groups of travelers that will be affected differently: consumers who already have booked vacations; consumers who are “on the bubble,” meaning they are pondering trips and how long to make them; and consumers who “would if they could.” “For the people who’ve already booked vacations, we forecast this money is going to enhance their travel budget,” Jahn said. “As for the group on the bubble, this could push them to extend their travel and help them maybe upgrade. And for the would-if-I- could group, this could hopefully push them to go travel.” Ric Leutwyler, senior v.p. of brand quality and management services for Best Western International, said he expects to see a bump in summer reservations. “We believe 2008 will mark the revival of the great American road trip, as families are staring down a crisis in the airlines industry and an unattractive international currency exchange rate,” he said. Both experts who conducted studies admit some consumers will use this money to pay down debt or save for the future, especially in the down economy. In fact, according to a National Retail Federation survey cited in the University of Tennessee study, 40.6 percent of consumers plan on spending their 2008 economic stimulus checks while 28.3 percent plan on paying down debt and an additional 22.8 percent plan on saving or investing the extra funds. But Jahn’s study banks on previous data that analyzed actual spending after the 2001 economic stimulus rollout, when consumers said they planned on paying down debt but actually spent more than they indicated they would. And Yesawich said that even if a small percentage of consumers spend the money on travel, it could make a large difference. Because of the many people who claim they want to use the extra money to pay down debt, Yesawich warns hoteliers and travel companies against marketing toward consumers receiving checks. “I think the prevailing sentiment that comes through the press, the general consensus is you should be more responsible with the money,” he said. “When it comes to a promotional activity tied to the rebate, there are mixed emotions. Marketers are fearful of what could be a publicity backlash.” jfreed@questex.com Keep Your Business On Track Stop the bleeding. Are rising food prices squeezing you? They don’t have to. 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Table of Contents Feed for the Digital Edition of Hotel & Motel Management - May 19, 2008

Hotel & Motel Management - May 12, 2008 Contents Hotelier of the Year Leads Team to Victory Sheraton Builds on International Success Slower, Smaller Transactions in First Quarter Perspective Legal FAQ What Women Want Sales Clinic AAHOA Update Franchise Law Family Business Travel Trends Guest Column HotelWorld Update Trends & Stats Cleaning and Maintenance H&MM's 2008 Franchising Fees Guide FACs Evolve to Meet Brand, Owner Needs The Importance of Branding When Buying Ad/Editorial Index Marketplace Classifieds Checking Out

Hotel & Motel Management - May 19, 2008

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