Still Waiting to Book Q1 2012? Good Luck.

One of the many consequences of the economic downturn has been a dramatic increase in short-term booking for meetings. But with demand from leisure travelers and corporate travelers (both group and transient) solidly on the rise, things are about to get a lot tougher for those wait-and-see types.

Jim Schultenover, president of Krisam Group, which serves as a membership organization for a roster of more than 240 hotels worldwide, sees “a collision course” coming. “Even in markets that remain soft, they still have peak times where they have less availability,” he says. “I think the first quarter of 2012 will be a challenge for programs of any significant size in key resort destinations.”

According to Bobby Bowers, senior vice president at STR Research in Hendersonville, Tenn., speaking in a video at the company’s Hotel News Now Web site, “Room supply is really going to be muted over the next two years or more. That’s really going to help drive the health of the industry in general … the fact that there’s not going to be as much room supply.”

For meeting planners, of course, that “muted” supply will present challenges—including, as Bowers puts it, “more confidence from the revenue management angle for those guys to be able to turn down business that they might have accepted over the downturn, and also to be more aggressive on the rate side, too.”

Currently, rate growth is most pronounced among the luxury and upper-upscale segments, according to STR data. Average daily rate is increasing faster in major urban markets than in second- or third-tier markets, primarily because the major urban centers have a greater number of high-end properties. In March 2011, the luxury segment logged an average daily rate of $256.14; the upper-upscale segment came in at $146.51; and for upscale properties, the average rate at was $110.34.

Bowers says corporate travelers will drive the recovery, because that business fell farther than the leisure travel segment and therefore has the most ground to make up: “The corporate spigot was just about shut off” during the downturn. Watch the video at the Hotel News Now Web site

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