Nine Hotel Revenue Management Trends for the New Year
By Jean Francois Mourier Founder & CEO, RevPar Guru Inc. | January 15, 2010
The hospitality industry's crystal ball is, unfortunately, just as cloudy this year as it was this time last year. Though we can perhaps take comfort in the fact that those clouds are just grey instead of black and stormy, uncertainty is still the only thing that is certain for the hotel and lodging industry in general. Even with positive GDP last quarter (indicating that the recession is technically ending), hotels, resorts and other lodging properties are still experiencing depressed demand, low average daily rates and stagnant occupancy. In other words, low RevPAR. No one can know for certain whether these negative trends will persist through 2010 but following are my thoughts and projections for what 2010 has in store for the hotel industry.
In my opinion, the recovery will not be a dramatic upswell but rather a gradual overall improvement of the travel market that will allow the most astute operators to thrive and where others will fail. Success in 2010, in our opinion, is there for the taking, but it won't be easy.
1. Doing More with Less (Capital, Staff, Guests, etc.)
Despite the recovery, hoteliers should be prepared to do more with less this coming year. Guests will be stubbornly slow to return. Likewise, working capital (both operational cash flow and from borrowing activity) will be constrained, as demand and commercial lending continue to be elusive. Hotels and resorts will have to make the best of what they already have in 2010; in terms of guests, this means squeezing every drop of revenue from existing clientele and in terms of capital and infrastructure, it means squeezing every drop of revenue from every existing square foot.
And even with high unemployment suggesting a strong pool of applicants, hotels should also prepare for staffing levels well below what would have been considered normal just a few years ago. This will put pressure on managers to improve their systems, to relive the operational burden on short staffs and to improve processes all around.