Increase Hotel Revenue Even During Tough Times

One of the biggest questions in the minds of hoteliers around the world is can consumers afford to take a vacation? Or rather, can they afford it? In the second part of the 20th century, vacationing seemed close to being human right. Everyone takes a vacation at one point or another during the year. And because of global competition and the internet, it has become very affordable as well. However, with the economic crunch being felt by both the corporate travelers and the individual consumer, hotel revenue managers are realizing that this “human right” is not necessarily concrete. They need to look for ways to increase RevPAR and boost profitability.

According to Norbert Walter, the Chief Economist of Deutsche Bank Research, the market will get worse before it gets better. Several economists share the same view. At the same time, there are also others who believe that the economy will recover by 2010. Only time will tell which prediction is true. But what is undeniable right now is that hotel sales are down and a lot of companies in the hospitality industry are cutting rates in order to cope.

Although the oil prices have fallen, the stable costs of transportation are not enough to get people back to traveling. The world is experiencing its deepest recession since the war, according to Dr. Walter. Because of this, it is critical for hotel revenue managers to be cautious about the next year. He said that “We have been trying a lot of different therapies to get us out of the crisis”. Yet, none of this provides an assurance for the future. The picture is far from being out of control though, because as of now, the government is doing what it can to help all industries.

Correctly interpreting the result of economic contraction, the chief economist focused on its effect on tourism. The crisis has undeniably dampened the outlook for hotel sales. In particular, the middle and upper segments took worst hit. As a result, it is predicted that the luxury enjoyed in the past will be difficult to regain. Despite all these setbacks though, traveling isn’t dead. It is important to realize that it is among every man’s dream to travel, explore new sights, and discover new sights. This will not change and the hotel industry will certainly gain momentum once the economy improves.