Business Travel News - June 8, 2009 - (Page 27)

HOTEL COMPANIES Buyers Gain Sway As Hotel Seller’s Market Halts By Michael B. Baker Analysts warned that the seller’s market that had dominated the lodging industry for several years would ebb in 2008, but none predicted the sharp U-turn the industry took, leaving buyers in an unexpectedly strong negotiating position amid falling rates, revenues and occupancies. “2008 started off very well until the third, almost the fourth quarter,” said Isadore Sharp, founder, chairman and CEO of Four Seasons Hotels and Resorts. “We assumed it was going to be a slowdown. We had planned to be a little more conservative in our forecasting. It was the latter part of the fourth quarter when things fell off the cliff.” That cliff dive ended with every hotel tier from luxury to economy in the red in terms of year-over-year change in occupancy and revenue per available room for the full year, according to Smith Travel Research. Overall occupancy was down 4.2 percent, and revenue per available room was down 1.9 percent, though hotels did manage to increase average daily rates by 2.4 percent for the year. Performance in the first quarter of this year has not been much better, with overall RevPAR plummeting 17.7 percent, occupancy down 10.9 percent and average daily rate down 7.7 percent, according to Smith Travel Research. For the full year, RevPAR is expected to drop by 9.8 percent, occupancy by 6.5 percent and average daily rate by 3.6 percent. Few markets globally are bucking those trends—outside of a few emerging markets, like Abu Dhabi—which makes this lodging industry downturn one for the history books, said Sue Brush, senior vice president and global brand leader for Westin Hotels & Resorts. The hotel industry has always been one of up and down cycles, said Brush—a 30-year industry veteran who is retiring at the end of this year—but the global scope of this downturn makes it unique. “It’s not as finite,” Brush said. “The Gulf War started and ended. Sept. 11 was one catastrophic event. This one seems to be more pervasive, and there’s more uncertainty around it.” That uncertainty extends as buyers prepare to enter into negotiations for 2010 hotel rates. They already have been renegotiating the rates they set for 2009, before the extent of the lodging industry downturn was evident. Some buyers found themselves in a looking-glass world as 2009 began: group rates near or above transient rates in certain markets, discounted leisure rates cheaper than corporate negotiated rates and hotels that previously shunned negotiations suddenly returning phone calls. “Companies and hotels are looking at ways to maintain the greatest Continued on page 28 BETWEEN THE LINES The hotel industry in 2008 saw little major merger and acquisition activity, so the top 15 hotels by systemwide revenue performance changed little from 2008. Choice Hotels International moved up one spot, above Host Hotels & Resorts, and Sol Melia displaced Interstate Hotels from the final spot in the top 15. Wyndham Worldwide Corp. in July 2008 completed a $131 million purchase of U.S. Franchise Systems from a subsidiary of Global Hyatt Corp. The acquisition added the 91 hotels in the extended stay Hawthorn Suites brand and 298 economy Microtel Inns & Suites to Wyndham’s portfolio, which already was the largest by number of hotels. Singapore-based Hotel Plaza Limited, owner and manager of Parkroyal Hotels and Resorts, in October 2008 acquired Pan Pacific Hotels and Resorts from its holding company, UOL Group Limited. The company this year is renaming itself Pan Pacific Hotels Group Limited but is listed in these charts by its 2008 name. HOTEL COMPANY STATISTICS, 2008 TOP 15 BY REVENUE IHG 19,100,000 Marriott 13,000,000 Accor 8,500,000 Hilton 8,500,000 Best Western 7,800,000 Carlson 7,500,000 Hyatt 7,500,000 Wyndham 7,000,000 Starwood 5,907,000 Choice 5,300,000 Host 5,288,000 Four Seasons 3,000,000 Fairmont Raffles 2,400,000 NH 2,005,778 Sol Melia 1,457,671 TOP 15 BY NUMBER OF HOTELS Wyndham 7,093 Choice 5,827 IHG 4,186 Best Western 4,018 Accor 3,982 Hilton 3,261 Marriott 3,178 Carlson 1,013 Starwood 942 Extended Stay Hotels 686 Hyatt 371 Rezidor 260 Interstate 226 Sol Melia 224 Tharaldson 223 TOP 15 BY NUMBER OF ROOMS IHG 619,851 Wyndham 592,880 Marriott 560,681 Hilton 547,318 Accor 478,975 Choice 373,884 Best Western 303,888 Starwood 284,800 Carlson 151,077 Hyatt 114,000 Sol Melia 82,677 Extended Stay Hotels 76,384 Host 60,216 Rezidor 54,700 NH 51,591 ABOUT THESE CHARTS These charts cover hotel companies that own, manage or franchise hotels globally and break down the hotels by type of ownership wherever possible. Hotels in which companies hold a minority interest are not included, unless otherwise indicated. For companies based outside of the United States, revenue figures were converted to U.S. dollars using the exchange rate from Dec. 31 of the year for which the revenues were reported. Unless otherwise noted, the companies provided all data as of Dec. 31, 2008. BUSINESS TRAVEL SURVEY 2009 BUSINESS TRAVEL NEWS • www.BTNonline.com • June 8, 2009 27 http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News - June 8, 2009

Business Travel News - June 8, 2009
Contents
Agencies, Corporate-Owned
Airlines
Car Rental Companies
Chauffeured Transportation Companies
Corporate Payment Systems
Hotel Companies

Business Travel News - June 8, 2009