Intelligence Report: September 2006

Meeting Planning

On the Upswing and Gaining Speed
No doubt about it—the hotel industry is coming back. A Smith Travel Research report recently revealed that industry occupancy during the second quarter rose slightly over the past year, reaching 66.8 percent in April through June. The trend is reflective of a 2.1 percent overall growth in the first half of 2006.

And brighter days seem to be on the horizon. According to a report issued by PKF Hospitality Research, U.S. hotels are forecast to enjoy their fourth consecutive year of profit growth in 2007. By the end of 2007, the average hotel in the nation is projected to achieve an operating profit of $15,996 per available room—up 9.8 percent from the 2006 year-end projections.

The upswing is certainly good news for hotels that have been struggling to recoup losses after the 2001–2003 economic downturn. But the hospitality industry is not out of the financial woods yet. The forecast profit level is just slightly above the $15,674 mark achieved in pre-recession 2000. In real dollars, most owners and operators are still about 21 percent behind pre-recession levels.

In With the New
What was good for one, is good for the other. At least that seems to be the philosophy at Four Seasons Hotels and Resorts and Castle & Cook, which plans a $50-million upgrade and re-branding for The Lodge at Koele, Lanai. The announcement comes on the heels of a recently completed renovation to the Lodge’s sister property Four Seasons Lana’i, as spotlighted in our “Out With the Old” story in the July issue. The Lodge’s renovations will include a major enhancement of all 102 guest rooms and suites, and additional upgrades to the public areas, including a Chinese-imported Pagoda that will be constructed on the resort grounds.

The “Wynds” of Change
Independence is the first of the many changes in Wyndham Worldwide’s future. The company has completed its spin-off from Cendant Corp., making it one of the world’s largest lodging companies. Cendant will keep the company’s rental car businesses, Avis Rent a Car and Budget Rent a Car, changing the name to Avis Budget Group at the end of this month.

Physical changes will also be a part the company’s move into the future. Wyndham Hotels and Resorts debuted exterior and interior images of new prototypes for its guest rooms, lobbies and other public spaces system-wide. Instead of traditional front desks, a “pod” system removes the traditional desk barrier in the lobby. And among the new furniture for the guest rooms, you’ll find the comfy Smart chair, equipped with easily accessible power and Internet outlets and pivoting table arms. Clearly, the future has arrived.

Thinking Big
A Grossman Company Properties affiliate has acquired the 164-acre Pointe South Mountain Resort in Phoenix. Plans are for a $50-million renovation that will upgrade the resort’s 640 suites, strategically conducted over several years. Also coming down the pipe are a new grand entry and an expanded Oasis water park, plus an additional restaurant, extensive landscape improvements and other amenities.

One Tough Crowd
The Sheraton Seattle Hotel had much to celebrate when it recently opened the doors of its newly expanded ballroom to its first group, Microsoft’s TechReady Conference, which was “very pleased” with the expansion. The grand opening marks the completion of the first phase of the hotel’s $130-million renovation project that began last August. The expansion added 4,200 sq. ft. of space to the Grand Ballroom (18,000 sq. ft.), allowing the hotel to host a variety of large events.

New Consort For Princess
Strategic Hotels and Resorts announced an agreement to acquire The Fairmont Scottsdale Princess, a 651-room destination resort, from an affiliate of Fairmont Raffles Holdings for $345 million. The deal, which is expected to close at the end of September, will also include a 10-acre adjacent property for $15 million. The Phoenix/Scottsdale area is one of the strongest lodging markets in the country, which sparked the transaction.

Who Says There’s No Free Lunch
Making hotel reservations on-line might leave a little extra room in your wallet (or your company’s) now that the Scottsdale Convention and Visitors Bureau launched an on-line promotion to drive up hotel bookings on its web site. If you book a room at one of the 20 participating hotels, at either or, you will receive a $25 dining voucher for on-property restaurants. Best not to put it off too long, though. The dining vouchers are good through December 2006, but all bookings need to be completed by September 30 to receive a certificate. or

Popularity Contest
Orbitz, the online travel company, recently named its top five most visited domestic and international destinations. Included in the list were two Western cities: Las Vegas, which came in second, and Los Angeles, which ranked fifth. Internationally, Cancun and Vancouver placed second and fifth, respectively. Orbitz projects that Albuquerque may nudge out another finalist when it releases future destination trends.