Back to full May / June 2006 email.

May / June 2006 Article

Living with Rising Hotel Rates

Krisam Group announced results of a proprietary survey of its hotel members, in which approximately nine in ten hotel respondents said they believe group rates will continue to rise for the remainder of 2006. But those surveyed also indicated that hotel upgrades were providing better value. Called “Staying Close to the Customer: Notable Trends for Meeting Planners” the survey did point to ways for clients to maximize their budgets in spite of rising costs. Here are some key results and some advice on how meeting planners can stretch their dollars.

• Group rates in all parts of the country appear to be strong and strengthening
• Approximately 75% of respondent hotels say they have recently implemented, or will implement before the end of 2006, major renovations or facilities upgrades based on increasing demand and the evolving needs of their customers.  Among the renovations and upgrades mentioned most frequently, were:
  * Room renovations
  * Renovations or additions to meeting space
  * Spa enhancements or addition of a new spa facility.

Hotel respondents also listed the factors they believe are most important for attracting group business in today’s competitive environment:

• Location of the property, including distance from major airports and proximity to key attractions
• Brand or property recognition, unique individual hotels succeeding in setting themselves apart from big branded properties
• Value provided in comparison with competitive set
• Experiential factors, such as additional staff training, or staff additions or enhancements

The survey pointed to several key actions meeting planners can take to get the best value and experience:

• Consider alternative top-level markets located near higher-demand, higher-priced markets, but that may have more availability.
  
  The survey reinforced that first class facilities and services exist in cities across the country, but that dollar for dollar, additional value can sometimes be found, say, in Boston, rather than Manhattan. If scheduling permits, planners might consider cities that not only offer a better rate, but refreshing, unexpected experiences for guests, as well.
   
• Note geographical differences. The survey revealed that hotels in geographical areas such as New England, Central Florida and the Desert Southwest may offer reasonably priced, high-quality alternatives to bigger, higher-priced markets nearby.
   
• Maintain flexibility in booking. Sometimes meeting or event dates are set in stone, but other times they may not need to be. Hotel respondents noted that considering changing dates or altering the pattern of a stay, can not only ease pressure on the rates, but may also on other services or costs as well. Krisam makes it a priority to offer planners up-front options that save time and money when they book in ‘super-hot’ markets, and indeed, in any market. Sometimes, a day or a week can make a big difference.
   
• Consider the ‘new and hot’ but also the ‘tried and true’. New, independent hotels are a very important part of the market today. But many long established hotels can also provide great experiences and excellent value. The survey indicated that long sought-after renovations and property updates are making some long-established hotels well worth revisiting.
   
• Weigh location and value, but also valuing the experience. One of the most interesting aspects of the survey was the extent to which Krisam’s member hotels found it important to invest in ‘experiential’ aspects of the properties, such as enhanced staff training, spa enhancements and special touches in the rooms, such as the latest in-room wireless technology or plasma televisions.