Meeting News - May 25, 2009 - (Page 20)

Travel Dashboard Airlines See Some Stabilization, But Avoid Excessive Optimism April airline traffic reports showed some signs of improvement over March and airline executives pointed to stabilization in revenue and demand declines, as carriers continue to search for the bottom of the business travel recession—which analysts said could lag an economic recovery. While airline CEOs said the revenue environment wasn’t getting worse, they also were reluctant to say it was getting better, and they reported particular softness in the corporate segment in first-quarter earnings reports last month. Buyers, meanwhile, show few signs of not getting worse.” Major domestic carriers, which reported first-quarter losses last month—save for AirTran and JetBlue, which operate largely domestic networks and are less vested in the corporate market—said premium demand for international travel remains particularly weak, and corporate travel continues to lag demand in other segments. Corporate demand deterioration, established more than a year ago and exacerbated amid the mounting financial crisis last fall, shows few signs of recovery. The National Business Travel Association late last month released a survey that showed 84 percent of 119 travel buyer respondents reported travel budget cuts since October 2008, and 36 percent said expenditures decreased more than 15 percent. —Jay Boehmer After Dire Q1, Hotel Analysts See Steeper ’09 Decline First-quarter performance by multiRough First Quarter For Hotels brand hotel companies underscored the RevPAR Change, Q1 2009 Vs. Q1 2008 deep difficulties the industry is facing, parNorth America International Total ticularly in upper-tier hotels, as analysts Choice -10.3% NA NA continue to pare 2009 expectations. -16.2% -24.1% -19.6% In the first three months of this year, the Marriott Starwood -22.8% -24.4% -23.5% U.S. lodging industry saw revenue per Wyndham -13.4% -5.5% -11.3% available room drop 17.7 percent compared with the same period in 2008, Sources: Hotel quarterly earnings reports according to Smith Travel Research, which also showed occupancy down 10.9 percent and avernew accounts that are actively booking group events, age daily rate fell 7.7 percent. such as associations and smaller accounts,” Starwood “With the first quarter of 2009 now behind us, it is Hotels & Resorts Worldwide CEO Frits van Paasschen clear that declining room rates are taking a harder toll said during Starwood’s earnings call. “We saw 3,000 on performance than we were expecting,” Smith Trav- sales and hotel executives hit the streets to call over el Research president Mark Lomanno said in a state20,000 customers in North America.” ment. “It appears that many hoteliers are embracing Marriott International CFO Carl Berquist said durthe very same pricing and room distribution strateing Marriott’s earnings call that persistent corporate gies implemented in the 2001/2002 downturn.” demand weakness has sparked deterioration in pricing In response, STR in late April revised its 2009 U.S. power, noting “significant competitor discounting of hotel industry forecast to project a 9.8 percent yearroom rates for corporate business in many markets.” over-year decline in revenue per available room, a Marriott would “not lead the market down on much deeper drop than its late October 2008 projecrates,” Berquist said, but added the company would tion of 2.5 percent, though it said some recovery also not “lose share by failing to respond,” adding, “Room is likely in the second half of the year. For the full year, rates are likely to remain weak until the economy STR is forecasting 2009 occupancy to be 56.5 percent, shows meaningful improvement.” down 6.5 percent from 2008 levels. The forecast for Berquist said transient demand showed its first average daily rate is a 3.6 percent decline. signs of weakness a year ago, led by the financial servAll publicly traded major U.S. hotel companies ices industry. “We saw some resilience in pharmaceureported double-digit percentage decreases in RevPAR ticals and defense in the first quarter,” he said, “but for the quarter. this was only relative to the other sectors we tracked.” “We redeployed some sales associates to focus on —Michael B. Baker Delta president Ed Bastian refreshing corporate travel budgets or relaxing policies. Delta Air Lines president Ed Bastian, echoing sentiments shared by other airline executives reporting financial results last month, said, “While we have seen signs of stabilization in revenue trends, at the same time we haven’t seen any indications of improvement. Right now, our May and June is shaping up to be similar to a combination of March and April. In short, things aren’t good but they’re also 20 MeetingNews May 25, 2009 www.meetingnews.com http://www.meetingnews.com

Table of Contents for the Digital Edition of Meeting News - May 25, 2009

Meeting News - May 25, 2009
Contents
Newsmakers
MeetingNews Research
Viewpoint
Meetings Tech
Meetings Spotlight
Construction Cites
Meeting People
Incentive Insider
Travel Dashboard
Dateline: Reno, Nevada
East Regional
Dateline: Texas
Mid-America Regional
Golf Meetings
Resort Showcase Contents
Atlantis
Beau Rivage Resort & Casino
Bellagio
Harrah’s/Harveys Lake Tahoe Casino & Resort
The Venetian and The Palazzo Las Vegas
Radisson Aruba Resort, Casino & Spa
Special Section: Florida

Meeting News - May 25, 2009