2008 forecast/trends in the hotel industry: 'expect price-cutting' and panic selling
Jan 14, 08 | 1:57 am: A leading hotel reservations brand is forecasting a period of ‘price-cutting' and ‘panic selling' of bedrooms in the tourism industry starting within a matter of months.
· ‘Downward spiral in demand could last years´, says Supranational.
· Strong revival in the use of ‘trouble-shooting´ travel agents predicted.
Supranational Hotels lists consumer debt, environmental taxes, the high cost of fuel, recession-prone economies, and loss of corporate confidence as factors likely to induce a ‘severe downward spiral in demand.´
According to Supranational managing director Niels Pedersen, the return to a buyers´ market ‘could last five years´, with the lean period a ‘counter-balance to recent buoyancy that has led to a complacency towards costs and unsustainable increases in tariffs.´
He comments, ‘the situation will further worsen in 2009 and 2010 when hotels presently under-construction in key locations are opened. The worst hit sectors will be business travel as export markets weaken, main holidays which will be shortened, and weekend breaks which will be reduced in number.´
Supranational Hotels also list further trends affecting the brand and the industry for the coming year:
· a third of its member hotels offer free wi-fi and this proportion will nearly double as this becomes a ‘must-have´ amenity for executive travellers
· only a third of hotels any longer include breakfast in the tariff and this percentage will continue to fall
· only 10% of hotels offer silver service dining, and this figure will decline further because most guests prefer lighter brasserie meals
· only 5% of hotels are environmentally-minded but this total will increase largely because potential cost-savings are identified, rather than for any concern about the planet
· around 80% of bedrooms within Supranational are now designated no-smoking, and this figure will grow industry-wide
· almost all Supranational hotels honour price parity guarantees and this will become universal
· cancellation policies are generally becoming more severe with promotional tariffs increasingly non-refundable
· hotel revenue managers will concentrate more on minimising discounts than maximising rack rates
Supranational also predicts a strong revival in the use of those travel agents and specialist travel advisers who offer tourism trouble-shooting services. This is expected to appeal to customers increasingly nervous about internet experiences of lost or double-bookings, reservations made in wrong hotels, undisclosed ‘hidden´ extras, and the absence of voice centres when plans change or refunds are due.
About Supranational Hotels
Supranational Hotels represents properties in over 70 countries and generates GDS reservations valued at 200m USD annually.