Declining room rates

Travelmole has a lead story headlined “No gamble: hotel room rates declining”. The focus is on Las Vegas where a “new survey by LasVegasAdvisor shows that rates are lower than they’ve been in five years”.

The Sin City focused website “found that half of the 84 casino hotels surveyed offered July rates of $49 or less per night; 30 casinos had rates of less than $40 a night. There’s even a bargain rate of $19.99 offered by Palace Station”. The malaise extends even to luxury hotels where prices have been slashed.

Declining hotel rates may be coming to a city near you as many observers, blaming cutbacks in airline travel, have projected a future drop in hotel rates. PKF Hospitality Research is one of the prophets of doom and has predicted “a decline in lodging demand greater than that experienced during the turmoil following the terrorist attacks on September 11, 2001”.

Mark Woodworth, President of PKF says airline capacity could be reduced by 10% with a concomitant drop in lodging demand of 3.9%. That, according to Mr. Woodworth is greater than the 3.3 % drop in demand in 2001. The 3.9% drop represents as much as $4.3 billion in revenue on an annual basis. “With losses like this, hotel operators would be forced to make drastic cutbacks in staffing and other operating costs,” Mr Woodworth said.

The vertiginous climb in fuel prices has already resulted in hotels feeling compelled to offer relief to travelers in order to spur occupancy. While demand constriction has resulted in a lowering of room rates elsewhere, New York remains on an upward trajectory owing to the dollar’s continuing woes resulting in strategies such as these offered by the Chicago Tribune’s travel reporter for those in search of a bargain in Manhattan. The tips include taking advantage of last minute dips in rate to Sunday stays besides staying in areas such as Chelsea where hotel rates tend to be lower.

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Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.

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