The crystal balls were rolling at the Hotel Sales &Association International-New York University Industry Strategy Conference in New York City in late September, with a panel of hotel experts offering a situation analysis as well as a glimpse into the future of the hospitality industry.
The good news, according to Betsy O'Rouke, senior vice president, marketing, Travel Industry Association of America, is that hotel occupancy has bottomed out. “Business travel will improve in '04,” she said, meaning that face-to-face meetings should see some improvement, too. Quoting PricewaterhouseCoopers' predictions, she said revenue per available room night is expected to increase by 4.9 percent in 2004, followed by a 3.4 percent rise in 2005. Demand is also expected to rise by 4 percent next year, she said.
Bjorn Hanson, PhD,hospitality industry managing partner, Pricewaterhouse Coopers LLP, who said hotel occupancy in 2002 reached its lowest point in 31 years, said: “The meetings business is a disproportionate amount of hotel business.
“For most major cities, it is the best market in terms of share of demand and share of revenue,” he added. In 2002, Hanson said, meeting business accounted for 27 percent of profits at hotels, compared to 20 percent in 2000.
Planners would be wise to shop for meeting destinations by city if rate is a priority. Cities such as New York that have been hurt because business travel and international business have been in steep decline can provide good value over the right dates.