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Hotel GMs Cautiously Optimistic for Rest of 2010July 8, 2010 By: Staff
Officials of Chesapeake Hospitality, a third-party hotel management company, announced that a recent survey of its general managers found an overall positive, but cautious, optimism regarding the outlook for the hotel industry for the remainder of the year. The survey was conducted during Chesapeake’s 19th annual general managers conference held in Maryland.
“While a guarded optimism remains among operators, there’s an obvious confidence being fed by an overall positive first half of the year,” said Kim Sims, Chesapeake president. “Occupancy is making a comeback, and Average Daily Rate is trending upwards in some markets, too, although it remains our GM’s principal concern and focus. When polled, more than one-third of attendees said they are experiencing growth in corporate business, while another 27 percent have seen increased leisure demand. We see these as very encouraging signs on the road to recovery.”
The general managers expressed lingering concerns about the outlook for business meetings, however, with 90 percent of respondents citing shorter meetings (more one-day events, often without a room block) and lower food and beverage revenues as common.
“We believe this is a short-term issue,” Sims noted. “Historically, group business cuts back drastically during economic hard times. Weak economic conditions continue to influence decisions regarding corporate meetings, or if a meeting will be held at all. We also hear feedback that companies know they need to meet face-to-face to get business done more effectively and to build relationships. As the economy continues to grow, so too will this segment.”
While nearly 20 percent of attendees expect to see rate increases during upcoming negotiation periods, the remainder felt things would remain flat. Only one respondent expected a possible downturn in rate.
“Overall, the hotel industry continues to improve, getting stronger virtually every week, and we are working hard to continue moving the needle further into positive territory,” Sims said. “At the end of the day, hotels will thrive based upon superior service."