Lower Demand for Hotel Rooms Means Better Rates for Travelers
There may be a silver lining to the struggling economy: travelers are finding that with fewer rooms being booked in hotels across the US, hotels have been forced to lower their prices. With the extreme competition and with the hotels trying to maintain occupancy levels, customers are enjoying better room rates.
Indications are that 2010 will likely see improvement over 2009, but overall, the travel industry in general is still challenged. Many large companies are limiting or eliminating business travel expenses all together.
Medium sized markets that don’t have on as much convention or tourism business have been hard hit. The manager of a downtown Peoria IL hotel says that this has been the most difficult winter he’s seen in the 10 years he’s been in town.
Consultant Mark Lamanno of Smith Travel Research in Hendersonville, Tenn., said that the demand nationally for hotel rooms in 2009 fell below the dip the industry experienced just after 9-11. And a PKF Hospitality Research group report indicated that in 2009 the US lodging industry had the greatest annual decline in revenue since 1932.
With the large decrease in demand, those areas that have had new hotels enter their market area have been hit the hardest. A hotel’s location plays a huge role in its bookings.
Online booking engines have also had to become more creative to stand out among their many competitors. With an increase in customers looking for the best rate, hotels are forced to stay competitive in the internet space as well.
Consumers are finding that because of this increase in lower rates, they have been able to upgrade to a better hotel for the same price they used to pay for a lower class hotel. There is also a trend of cusomers waiting longer to book their rooms hoping to get a better deal.
Although most think that the economy will eventually recover, hotel managers say that their challenge is to keep their staff motivated to navigate the difficult times so they’ll be ready when the economy sees an upturn and business returns to usual. The Peoria Hotel general manager says that it’s up to him to keep things going.