Monthly Archives: May 2014

Higher Prices Aren’t Scaring Away Summer Travelers

By: Kate Rogers Published May 08, 2014 FOXBusiness

Americans are welcoming summer vacation this year with open arms after a rough winter, but their gateway is going to cost more than in the past.

New data from travel site Orbitz finds 88% of Americans plan to take a summer vacation this year, up 11% year-over-year. Marita Hudson Thomas, Orbitz public relations director, says the numbers reinforce signs of a recovering economy.

“We had a horrible winter—one of the worst in history. People want to get to summer and the heat and warmth- they are running from the terrible winter.”

Summer travel costs are up this year, according to Orbitz, with airfare up 6% and hotel prices up by 12% across the reports’ top destinations.

But travelers say they are willing to spend more this year to vacation, with 51% saying they’d shell out $2,000 or more for their vacation this summer, versus 44% last year.

Travelers on a budget plan to use their travel rewards to pay for hotels and airfare and are willing to buy food and eat in their hotel rooms to save some cash.

More Americans are traveling to cities this year, Orbitz finds, and while hotel prices are up, travelers can find rooms for under $200 in half of the top 10 destinations. Most travelers plan to hit the road in June and July (71%).

This year, Cancun edged out Orlando as the top destination, which has consistently been in the top spot, Hudson Thomas says.

“It’s still a great family destination with Disneyworld” she says of Orlando. “Cancun is our only international destination this year.

The biggest crowds can be found on the Friday before Memorial Day and the biggest travel day will be Thursday, July 3, the report says.

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Tremendous Travel Outlook

Lifted from Hotel Interactive
Monday, May 5, 2014
By Glenn Haussman

Are you feeling good about the state of the hotel industry? Well if no, then it’s time to reevaluate your thinking because things are going absolutely fantastic when it comes to the travel economy. In fact 2013 was an incredible year that broke most real dollar records and this year it’s expected last year’s records will be short lived.

No, not because the industry is falling down, but because it’s rapidly rising. So today’s records will be superseded by even better results when this year is tallied. Industry wide we’ll see even higher numbers for ADR and RevPAR as well as rom nights sold. And all indications point to the next few years showing more continued growth.

Moderate supply growth combined with more American traveling than ever before combined with a massive influx on international travelers will help hoteliers push rates (if they’re smart enough). Oh yeah, more people are also traveling for business than in years and that weakening of group business demand we’ve been worried about seems to be stabilizing. In all, business trip taken this year should climb 1.7 percent to more than 461 million trips says the Global Business Travel Association Business Travel Index Outlook.

Examining industry fundamentals, records are being broken everywhere, including most industry revenue ever at $122 billion according to STR for 2013. Other records broken in 2013 were ADR, RevPAR, and most room nights sold at 1.1 billion.

According to numbers supplied by PKF, final 2013 occupancy was 62.3 percent and is expected to rise to 63.2 percent and 64.4 percent for 2014 and 2015 respectively. It’s also expected that ADR will increase 4.8 percent to $115.60 this year and rise another 5.6 percent to $122.12 in 2015. ADR and occupancy increases together will help propel RevPAR from $68.69 (5.4 percent increase from 2012) up another 6.6 percent to $73.10 in 2014 while rising an additional 7.5 percent to $78.62 in 2015.

Even better news is the economy is soaring, both in and out of the hotel industry. The general economy is seeing record high stock market valuations while large type sale items such as homes and cars are doing very well. Plus, more things are being made in America than in a generation.

At this week’s BITAC Tech & Ops, taking place this week at the Peabody Memphis, we utilized our advanced real-time polling system to break down persisting myths about the state of the economy, the hotel economy and the travel industry at large. And we’re happy to report those attending BITAC are collectively in a very good mood.

BITAC is of course the industry leading one-on-one meetings and relationship building event. This week marks the 48th BITAC meeting, which is attracted lodging executive elite representing leading and forward thinking companies. And they’re all here to come together at BITAC to problem solve, network, sign deals and exchange ideas to move forward the quality of experiences for hotel guests, while adding profits to the bottom line. There’s even time to cut loose, be social and network in a luxurious and relaxed environment.

Here is what BITAC Luxury attendees are thinking a third of the way through 2014:

How are you feeling about the state of the U.S. economy?
Bullish – 10.0%
It’s good – 41.8%
Neutral – 24.5%
A little worried – 21.8%
Freaked out – 1.8%

Do you feel your company is fully leveraged to take advantage of this upswing?
Very ready – 33.9%
Somewhat ready – 56.0%
Neutral – 7.3%
We are not prepared – 2.8%
Just hanging on – 0.0%

How do you feel about the state of the TRAVEL economy compared to one year ago?
Bullish – 25.0%
It’s good – 64.8%
Neutral – 9.3%
A little worried – 0.9%
Freaked out – 0.0%

How much do you expect to see ADR rise in 2014?
1-2% – 17.0%
3-5% – 65.9%
5-10% – 13.6%
10% or more – 1.1%
None – 1.1%
ADR will decrease – 1.1%

How much do you expect to see RevPar increase in 2014?
1-2% – 21.7%
3-5% – 50.6%
5-10% – 24.1%
10% or more – 2.4%
None – 1.2%
RevPAR will decrease – 0.0%

What is your perception of hotel owners’ approach toward raising rates?
Aggressive – 46.7%
Timid – 25.0%
Cautiously Optimistic – 28.3%

Are you seeing an uptick in new construction?
A significant uptick – 32.3%
A moderate uptick – 53.1%
Very few hotels are being built – 14.6%

In what year will the hotel industry peak?
2014 – 2.1%
2015 – 19.6%
2016 – 30.9%
2017 – 35.1%
2018 and beyond – 12.4%

Did your hotels break records with key fundamentals such as ADR & RevPAR in 2013?
We broke records! – 41.2%
We were close, but not yet – 49.0%
Not happening for us – 3.9%
Our numbers stink – 5.9%

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