by Suzanne Neufang
August 8 – HRS has long advocated that corporate travel managers have irrefutable data before they sit down and cut deals with hotels, whether it’s for a system-wide program or just specific properties in a single destination. As the 2018 RFP season gets underway…and we see mixed economic signals impacting global economies and hotel suppliers…that guidance looks to be spot on.
Here’s the good news; the U.S. economy features a robust stock market (surpassing 22,000 for the first time last week), consistently high monthly new job figures, and an environment where the hospitality segment is hiring more than many other sectors. IATA reported that global air travel grew by 7.9 percent over the first six months of the year: it’s easy to conclude that many of those travelers slept in a hotel during their journey. On the hotel chain front:
- Hilton’s development pipeline rose to a record 332,000 rooms, up 15 percent from last year
- Marriott’s adjusted net income increased 30 percent in the second quarter
- Hyatt’s net income for 2Q grew 30 percent
But here’s the bad news: TravelClick’s latest report noted that U.S. hotel bookings in the business transient segment are down 3.8 percent for the third quarter, and group occupancy is down more than five percent from last year. Analyst John Hach said that their data “predicts a prolonged decline” in most North American markets. GBTA notes that global business growth is projected to top five percent both this year and next….but all projections come with a caveat tied to the unpredictable political scene in nearly every region on the planet (see GBTA graphic below).
So…what can a travel manager do as they try to shape a relevant lodging forecast for the next six months to a year?
Like many things, the answer lies in staying focused and leveraging irrefutable benchmark and program data, coupled with keen insight on the company’s business goals. Showcase the value which a managed hotel program brings: the ability to drive spend and traffic to preferred properties, and leverage other discounted rates when it makes sense. Take the right steps, and workable metrics can be in reach.
Increase your odds for better outcomes – both in the short term and long term – by working with experts on rate trends, projections, and execution. Don’t underestimate the value of on-the-ground expertise as you consider new markets for your travelers.
Sure, reports and projections drive a lot of headlines. Successful benchmarking, sourcing and ultimate execution, however, is the final proof for lodging program success which every CFO appreciates.