Hotel & Motel Management - December 8, 2008 - (Page 24) 24 News H&MM December 8 , 2008 | HotelMotel.com www.HotelMotel.com/digital_edition Corporate downshift Continued from page 1 2.8-percent growth in total business travel costs, which could lead businesses to cut back on travel. Similarly, the National Business Travel Assn.’s 2009 Business Travel Overview & Cost Forecast predicted a 5-percent to 8-percent hike in total business travel cost. The Travel Industry Assn. Travel Forecast expects a 3.9-percent decline for business travel in 2009. “I do think you’ll see a majority of organizations change the way they do business—the number of travelers decrease, the length of stay decrease, the kinds of hotel change. I think you’ll see companies go back to the hotel and negotiate new rates,” said Kevin Maguire, CEO and president of the National Business Travel Assn. “In 2009, the hotel market appears to favor buyers,” said Herve Sedky, VP and GM of the Global Advisory Services and Meetings Solutions at American Express Business Traveler, during the American Express teleconference. He said “last room available” should be easier to negotiate for travelers, and buyers will push for discounts. But he expects hotel companies to protect rate structure and not be as open to low or moderate increases. Sedky said businesses are going to “shift thinking and focus more on viewing travel as an investment category. … In the ’90s, travel was viewed as a cost; now we are seeing travel viewed as an investment.” “It’s clear the corporate rates will increase modestly,” said Bjorn Hanson, clinical associate professor for the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University. “There may be no increase in rates paid, and there will be demand for including some hotel services at no cost.” Such services include fitness centers, breakfast and business center access, which Hanson said could be a difficult sunk cost for some hotels that lease out the services. Travel Catch-22 In this conservative spending environment, non-gateway or secondary cities are in an interesting position. In one way, they are more desirable as they often have lower rates and a lower cost of living. But the outlook of the airline industry in the Global Business Travel forecast counteracts this advantage, as it predicts fewer flights and higher airfares to get to these cities. “[Businesses] have to look at total cost,” Sedky said in the teleconference. “They take into consideration where employees are flying into the meeting—the cost of airfares going in as well as land cost.” Maguire said capacity cuts aren’t over in these cities: “[Secondtier cities] will be hurt even more than they have been. They may have great hotel rates, but if you can’t get there, it doesn’t matter.” Beneficial segments “Unfortunately, instead of looking for the good news, it really is looking at who will be affected the least,” Hanson said, naming upscale and midscale without food and beverage in particular. Greg Land, SVP of global sales and distribution for Wyndham Hotel Group, said he notices this trend toward upscale and midscale starting to take shape. “We have seen some softening at the upper-upscale level but are seeing people buy down to midscale and economy segments,” he said. Wyndham’s corporate travel departments have suggested customers move downscale to reduce travel spend without cutting trips. Airport hotels may be less affected by business changes, as they help reduce some of the overall spend of a trip. The St. Louis Airport Marriott, in anticipation of smaller corporate meetings shifting to airport hotels and secondary cities, invested $2 million in revamping its meeting rooms, which included more space and more video-conferencing options. “We’re banking on that need area being in place for at least a segment of corporate planners,” GM Leo Chandler said. ccrowell@questex.com CIRCLE NO. 114 http://www.HotelMotel.com http://www.HotelMotel.com/digital_edition http://www.hmrsss.com http://www.hmrsss.com
Table of Contents Feed for the Digital Edition of Hotel & Motel Management - December 8, 2008 Hotel & Motel Management - December 8, 2008 Contents Best Western Sets Spending Strategy Courtyard Turns 25, Unveils New Lobby New Division of MGM Goes Beyond Gaming Perspective Legal FAQ Marketing Matters Family Business On Finance AAHOA Update Satisfaction Trends HotelWorld Update Consultant’s Corner Trends & Stats IH/M&RS Editors’ Choice Award Winners Insurance Ad/Editorial Index Marketplace Classifieds Checking Out Hotel & Motel Management - December 8, 2008 Hotel & Motel Management - December 8, 2008 - Hotel & Motel Management - December 8, 2008 (Page 1) Hotel & Motel Management - December 8, 2008 - Hotel & Motel Management - December 8, 2008 (Page 2) Hotel & Motel Management - December 8, 2008 - Contents (Page 3) Hotel & Motel Management - December 8, 2008 - New Division of MGM Goes Beyond Gaming (Page 4) Hotel & Motel Management - December 8, 2008 - New Division of MGM Goes Beyond Gaming (Page 5) Hotel & Motel Management - December 8, 2008 - Perspective (Page 6) Hotel & Motel Management - December 8, 2008 - Perspective (Page 7) Hotel & Motel Management - December 8, 2008 - Marketing Matters (Page 8) Hotel & Motel Management - December 8, 2008 - Marketing Matters (Page 9) Hotel & Motel Management - December 8, 2008 - Family Business (Page 10) Hotel & Motel Management - December 8, 2008 - Family Business (Page 11) Hotel & Motel Management - December 8, 2008 - On Finance (Page 12) Hotel & Motel Management - December 8, 2008 - On Finance (Page 13) Hotel & Motel Management - December 8, 2008 - AAHOA Update (Page 14) Hotel & Motel Management - December 8, 2008 - AAHOA Update (Page 15) Hotel & Motel Management - December 8, 2008 - Satisfaction Trends (Page 16) Hotel & Motel Management - December 8, 2008 - HotelWorld Update (Page 17) Hotel & Motel Management - December 8, 2008 - Consultant’s Corner (Page 18) Hotel & Motel Management - December 8, 2008 - Consultant’s Corner (Page 19) Hotel & Motel Management - December 8, 2008 - Consultant’s Corner (Page 20) Hotel & Motel Management - December 8, 2008 - Consultant’s Corner (Page 21) Hotel & Motel Management - December 8, 2008 - Trends & Stats (Page 22) Hotel & Motel Management - December 8, 2008 - Trends & Stats (Page 23) Hotel & Motel Management - December 8, 2008 - Trends & Stats (Page 24) Hotel & Motel Management - December 8, 2008 - Trends & Stats (Page 25) Hotel & Motel Management - December 8, 2008 - IH/M&RS Editors’ Choice Award Winners (Page 26) Hotel & Motel Management - December 8, 2008 - IH/M&RS Editors’ Choice Award Winners (Page 27) Hotel & Motel Management - December 8, 2008 - Insurance (Page 28) Hotel & Motel Management - December 8, 2008 - Insurance (Page 29) Hotel & Motel Management - December 8, 2008 - Insurance (Page 30) Hotel & Motel Management - December 8, 2008 - Insurance (Page 31) Hotel & Motel Management - December 8, 2008 - Insurance (Page 32) Hotel & Motel Management - December 8, 2008 - Insurance (Page 33) Hotel & Motel Management - December 8, 2008 - Ad/Editorial Index (Page 34) Hotel & Motel Management - December 8, 2008 - Marketplace (Page 35) Hotel & Motel Management - December 8, 2008 - Classifieds (Page 36) Hotel & Motel Management - December 8, 2008 - Classifieds (Page 37) Hotel & Motel Management - December 8, 2008 - Classifieds (Page 38) Hotel & Motel Management - December 8, 2008 - Classifieds (Page 39) Hotel & Motel Management - December 8, 2008 - Classifieds (Page 40) Hotel & Motel Management - December 8, 2008 - Classifieds (Page 41) Hotel & Motel Management - December 8, 2008 - Checking Out (Page 42) Hotel & Motel Management - December 8, 2008 - Checking Out (Page 43) Hotel & Motel Management - December 8, 2008 - Checking Out (Page 44)
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