Global Industry Analysts, a respected market research firm, has just released its latest report detailing the outlook for the hospitality industry through 2015. The report indicates that the industry is rebounding strongly from the recent recession, and growth in the world economy should boost the size of the global hotel industry to $479 billion over the next three years.
A new travel survey conducted by Deloitte suggests that the hotel industry will rebound nicely in 2012 thanks to young business travelers increasingly performing more necessary work outside of their home offices.
This finding was part of the 2011 Business Travel Survey, an annual report put out by Deloitte to help the hospitality industry prepare for the year ahead. If this survey is any indication, the coming year will be defined by significant growth for hotels on account of the business traveler community.
Among other findings, the survey showed that more than 80 percent of all business travelers expect to travel at least as often in 2012 as they did in 2011. Much of this growth is centered around younger workers, who have finally been able to shrug off the effects of the most recent recession and begin their business careers in earnest; in fact, more than a quarter of all business travelers under the age of 44 expect to travel more often during the year ahead.
The growth of younger business travelers is due in part to a rebounding economy, which has helped businesses increase the amount of cash on their balance sheets. Real gross domestic product grew at a 1.8 percent annual rate in the third quarter of 2011, and most analysts expect that GDP growth in 2012 will be slightly higher, at around two percent.
Business travel revenue was even stronger than the general economy in 2011 with growth of 7.6 percent, according to the Global Business Travel Association. In addition, growth is expected to increase another 4.6 percent in the coming year as these younger workers spend more time on the road while conducting business.
Deloitte also found that younger business travelers have very different attitudes and expectations about the hotels they frequent when compared to older travelers, and hotels will need to adjust accordingly if they are to succeed in the future.
When compared to older workers, young business travelers put much emphasis on convenience, sociability, and sustainability. For instance, these travelers prefer expedited check-in, working in public areas of hotels and patronizing hotels that operate in an environmentally responsible way.
In short, younger business travelers expect more from their hotels: they make judgment calls before booking, and the lowest price is no longer the priority. Because of this, it is important that hotels choose only the best hotel management companies to run their operations. Companies like the Hotel Managers Group have plenty of experience in satisfying the needs of both young and senior business travelers.
The ultimate benefit from employing the best hotel management companies is loyal customers. Indeed, Deloitte found that younger business travelers are more loyal to hotels that treat them like valued customers. There has never been a more important time to engage the services of hotel management companies like HMG that will ensure that customers have the best experience possible.
The hotel industry will continue to see strong growth in 2012 – Although many economists remain uncertain about the prospects for the American economy in 2012, the hotel industry is expected to see solid growth this year as business travelers and family vacationers continue to demonstrate increased demand for hotel rooms.
This welcome news was provided by the North American Hospitality Review, a monthly report of anticipated hotel bookings and reservations that is organized by Travelclick, Inc. According to the report, occupancy rates are expected to increase by more than three percent this year. In addition, the revenue per available room should improve by an even healthier 5.3 percent.
These latest estimates indicate that growth in the hotel industry, which has improved for the past two years, will continue to be robust. This strong demand, especially from individual business travelers, will put upward pressure on hotel room prices in 2012, helping a hotel industry that has been attempting to recover from the effects of the most recent economic recession
Revenue growth is expected to be particularly strong in the first quarter of 2012, although results are expected to be somewhat more subdued in future quarters due to the relatively weak demand for hotel rooms from group travelers. With the continued uncertainty surrounding the economy, many groups have been reluctant to resume steady travel schedules. However even this segment of the traveling population is expected to slowly improve thanks to a nearly two percent increase in occupancy rates during the current quarter.
Regardless the hotel industry can expected a strong year ahead, especially in improving travel markets like Charlotte, Detroit and Indianapolis. This expected growth is all the more impressive given the fact that many areas of the economy have been unable to rebound from the lack of demand caused by the collapse of the housing bubble and the credit crisis in 2008.
Thanks to the European sovereign debt crisis, many investors have fled to safe assets like Treasury bonds in order to avoid the risks associated with declining economic growth. However the hotel industry should be able to overcome any potential problems thanks in part to the improving strength of corporate America, which has spent much of the past four year working to improve their balance sheets.
Cash holdings by American corporations have increased to nearly $2 trillion. In addition, earnings growth has been strong throughout the past year; in the third quarter, profits earned by American businesses grew by more than 13 percent. In future quarters, many analysts expect companies to utilize some of this cash in areas like business travel and lodging.
Despite all of the uncertain economic news, the hotel industry is becoming increasingly positive about the prospects of a great year in 2012. Not only will this benefit the hotels themselves, it will also help companies like the Hotel Managers Group, which seeks to benefit the hotel industry with the highest level of service and support. The Hotel Managers Group is poised to help hotels improve their business prospects as the industry prepares for continued growth in the coming year.
The traditional two week vacation appears to be a thing of the past. According to a recent Harris Poll survey, Americans are finding it difficult to take extended vacations in what is still a difficult economy. With many Americans worrying about their financial future, it appears that they are foregoing vacations of more than a week’s length and banking some of that discretionary income.
The Harris Poll, taken in November of 2011, asked the question whether or not the respondents were planning to take a vacation of 1 week or longer in the next 6 months. Only 30% of the 2,499 respondents gave a positive response to the poll question. When asked the same question back in May, 2011, right before the busy summer travel season, 34% said they were planning a vacation of at least one week in duration. The 4% decrease in long vacations may not be statistically significant, but it does continue to indicate that Americans are not feeling comfortable spending money in this slow-moving economy. The main reason that Americans are being cautious is that they are uncertain of what the future holds. Those who have jobs are worried that they might lose them and those without jobs are even more concerned that they will remain unemployed. Until the economy shows more positive signs of recovery, it is likely that Americans will continue to take shorter vacations than usual.
The situation is not going unnoticed by the hospitality and hotel industry. The Hotel Managers Group (HMG), based in San Diego, California, operates a number of hotels, motels and resort properties. They are enjoying greater occupancy this year and are making a concerted effort to aggressively market their properties to increase occupancy. The shorter average vacation time means that there will need to be a greater turnover of guests per room. In addition, it may be necessary to offer discounts or special deals to attract travelers to stay for a full week or more.
With the Holiday Season upon us, many people are spending their savings and discretionary income on gifts and presents. They will forego long and costly vacations and instead settle for shorter 3 or 4 day escapes. They may travel closer to home and choose less expensive destinations to spend their available travel dollars. Once Americans get past the fear of running out of money for essential expenses like housing and food, they will start to think about taking extended vacations. The hotel industry will be ready when the trend for shorter vacations is reversed and guests want to book rooms weeks and not days.
Technology has come a long way in the hotel and hospitality industry. At one time, guests had to go to the front desk to make a phone call. Back in the 60s, technology had advanced to include a phone, television and maybe a coffee pot in individual rooms. The big thing back then was the small mechanical box attached to the bed that, for a quarter, would vibrate the bed, and supposedly, give you a soothing massage.
Today, our world is so much more dependent on technology that the hospitality industry is taking steps to meet the needs of their guests. Hotel Managers Group (HMG) is among the leaders in incorporating new technology into both hotel operations and guest room amenities. With guests now carrying 2, 3 or even more electronic devices along with them when they travel, the demand for recharging those devices has grown. There is a great need for multiple outlets and plenty of power sources.
A survey, attempting to understand the latest technology wants and needs of hotel guests, was recently conducted by Frank Wolfe of the Hospitality, Financial and Technology Professionals (HFTP). About 3,000 people involved in the hospitality industry were asked to give their views on what was the most and least important technologies hotel guests would like to have in their room. Most of the respondents spent a minimum of 10 days per year traveling and staying in hotel rooms.
At the very top of the list was reliable, wireless internet connectivity. With approximately 90% of all respondents carrying a laptop and 82% never without their smart phone, it is easy to see why they wanted wireless internet connectivity. While business travelers generally have more electronics that need recharging, family travelers also use the same devices as well as media players and even gaming systems.
The telephone still remains a standard piece of technological equipment for hotel guests. It was not particularly important to the respondents that rooms are equipped with 3D televisions, but more than 75% of the guests wanted a HD television with added features such as room checkout, connections to play their own personal media and access to PPV or first run movies.
Other areas where there was relatively little demand for new technology included a bio-metric type of safe, voice activated control of lights, curtains and temperature and self-serve kiosks for check-in without having to interact with a front desk clerk.
Hotel operators have been and will continue to respond to the trends in guest room technology. Being first to the party with new technology may just give a hotel the competitive edge in the hospitality industry.