Post-recession, the hotel industry is seeing some of its biggest meeting demand ever. A solid shift to a hot seller’s market that has left many planners looking for relief. For the past three years, the industry has seen consistent increases in hotel occupancy, average daily rates, and RevPar (revenue per available room). Additionally, the hotel industry is seeing a record number of RFP’s (request for proposals) and is more selective than ever. While all of these factors give sellers more leverage, there are still ways, and people that can help planners maximize cost savings and other benefits.
We recently spoke with Lindsay Culbreath, CMHS, CHIA, Senior Director of Business Development & Marketing for STR who shares up to date analysis on current trends and market conditions and in addition we share how the right local partners provide an even more complete destination specific picture.
For meeting planners that might not be aware of your company, can you tell me what type of research STR conducts? What type of organizations do you provide your research to?
STR recently celebrated its 30th anniversary and is the leading authority on hotel industry performance trends. We provide clients – including hotel operators, developers, financiers, destination marketing organizations (DMO), analysts and suppliers to the hotel industry – access to hotel research with regular and custom reports. STR also provides a single source of global hotel data covering daily and monthly performance, forecasts, annual profitability, hotel pipeline, and hotel census information.
There are several ways in which the research STR provides can help meeting planners. To start, planners should start thinking more strategically about how data can assist in their negotiations. For example, planners can look at destination utilization. There may be a month where the destination is consistently struggling to fill rooms. Planners can take advantage of this information and potentially have more leverage when negotiating with hotels.
Additionally, planners can research day/month patterns. If for example, Thursdays are consistently underperforming in the destination, a planner can look into shifting a meeting by just one day and potentially save in their costs.
Lastly, a planner can have a custom report created by STR to look into the compression of their event and analyze how it affects the market. The report can show at what point their event has a positive impact on the destination. Events that plan years in advance and/or utilize different destinations will be able to show their impact on the destination and will help them in their negotiations.
We know it’s a seller’s market right now. Does your research indicate when meeting planners might see a shift in it becoming a more stabilized market?
It is definitely a seller’s market right now. In fact, 2015 was the hotel industry’s biggest year ever for hotel occupancy, average daily rate and RevPar. Our research shows that in the next 18 months it will still be a seller’s market with the increase in RevPar coming mostly from rate.
Do you see sites such as Airbnb.com and HomeAway affecting market conditions and/or the meeting industry?
STR recently conducted an analysis on the impact of these types of sites in Manhattan and the research showed there wasn’t a large impact. However, there is currently a lot of data on their impact that hasn’t been released yet. We’ve also learned that Airbnb in particular is pushing group business as a means for increasing their rental occupancy.
I’ve been reading that there are a lot of hotel renovations/new development underway in a lot of major destinations.
Absolutely, in fact, there are currently over 140,000 rooms under construction, which will be a 17% increase from 2015. A lot of the rooms being developed are upper and mid-scale hotels that may not include a lot of meeting space.
Of those 140,000 rooms under development, approximately 50% are in the top 25 markets.
One of the products you offer is forecasts. Being that many meeting planners secure their rates/dates and space years in advance, can you offer any advice to planners on what they should be asking their CVB consultant?
We have forecasts that go out 5 years. Additionally, we have a report on what hotel developments are coming up as far out as we know about the projects. These reports are helpful to meeting planners that plan years out in advance because they will be able to see if there will be a large influx of hotels and determine with their CVB consultant what the best options may be for them.
From DMAI’s empowerMINT.com
If you’re feeling overwhelmed by the current seller’s market or the multitude of data that is available out there, fear not. Your CVB consultant is your best, first option to help you. CVB consultants are destination experts and can assist all planners with understanding the unique destination demand factors in their destination as well as assisting with finding the best fit for your meeting. No one is more connected and more dedicated to the success of your meeting than the destination consultants at the CVB.
Interested in learning more? Connect with your CVB destination consultant in over 150 destinations at www.empowerMINT.com.
Be sure to join us in our upcoming webinar, where Lindsay will go into more detail, and offer great advice and suggestions in navigating the current seller’s market, be sure to register for the upcoming webinar, Still a Seller’s Market: How to Find Relief, Thursday, March 17, 2016 1:00-1:30 EST.