Source: Hotel News Now
By Bryan Wroten
July 22, 2020
REPORT FROM THE U.S.—The overall loss of demand in the U.S. hotel industry threw an almost impossibly sized hurdle in front of hoteliers already trying to figure out how to drive rate in the face of so much new supply coming online.
As hoteliers navigate the pandemic and its recent spikes in cases across several states and the eventual recovery, they are figuring out how to best price their rooms for those willing to travel.
Though there are a few exceptions, prices are down drastically compared to the same time in 2019, said Cory Chambers, VP and chief revenue officer at Hospitality Ventures Management Group. The decline in demand from business travel and group business has eroded prices. That is offset somewhat by some leisure travel and COVID-19-related group business, but there’s not enough of that to go around, he said.
Hotels that can secure this base business have been able to better hold their price positioning and stem rate losses, he said.
“The hotels that will be able to drive premium (rates) are the ones that are going to be able to instill the trust and confidence that we’re providing a clean and safe environment,” he said. “The market in general has adjusted to similar levels of service. So, it’s going to come down to where … guests feel the most comfortable.”
There is much less demand for hotels, which combined with supply staying mostly the same means downward pressure on rates, said Tony Sherman, founder and principal at Terrapin Investments.