U.S. hotel leaders lament lack of rate growth
Aug 26, 2014
Hotel industry executives speak about the lack of aggressive rate growth, customer acquisition costs, their top worries and other issues during the 12th annual Southern Lodging Summit @ Memphis. With an all-time record 113 million U.S. hotel roomnights sold during July, hotel executives believe their pricing power should propel operations to new heights.
Last week STR revealed that July’s performance obliterated the past monthly record by 5 million room nights. Against that backdrop, several hotel executives spent Wednesday morning at the Southern Lodging Summit @ Memphis trying to figure out how the industry can better capitalize on such strong demand.
“The reality is there’s still a gun-shy approach to raising rates,” said Bill DeForrest, president of Chicago-based Spire Hospitality. “(Operators) do tend to look at the markets and think our customers are much more aware of our pricing transparency. We’ve got product they’re willing to pay for if we give them the right experience. To move four-and-a-half percent in a low inflation market is nice, but I think we can do better.”
STR, the parent company of Hotel News Now, reported average daily rates and demand increased 4.8% and 4.7%, respectively, during the month. Year-over-year revenue per available room jumped 8.8%. Moderator Isaac Collazo, VP of performance strategy & planning for InterContinental Hotels Group, called this “the best demand environment ever.”
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