The economy has not been good for the hotel industry. Hotels have been particularly hard hit by the drop in business travel. Two years ago, according to Forrester Research, 42% of business travellers were brand loyal. This year, it’s down to 36%. Companies are looking for ways to cut costs, which means that business people won’t necessarily choose their favourite hotel brand, if there’s a cheaper alternative. 2010 will likely be just as hard on the hotel industry as 2009, as employers seek to cut travel costs more and more.
Hotels are responding by looking for ways to be creative without spending too much themselves. They hope to find ways to keep business travellers loyal without having to slash prices any further. They are, instead, doing things like offering free nights, upgrades and loyalty points. Some are being even more creative by including free breakfasts, free internet, late checkouts and paid parking as part of a business travellers package. Marriott Hotels, for instance, calls its package “Business Boost,” while Hyatt Hotels has “Business Plan” and Sheraton Hotels “Road Warrior.”
As part of its package, Hilton’s Conrad Chicago Hotel is giving guests their choice among best-selling books, and a personal shopper is available to help select gifts for those left at home.
In addition, hotels are trying to attract customers by giving them more for their money. They are doing things like reducing mini bar fees, offering free in room spa services or free dry cleaning. Some are even subsidizing meals. This helps them to entice customers to be loyal while keeping hotel rates stable; important considering per room revenue dropped by 13.8% last year.
So, hotels will continue to look for creative ways to attract business, without having to lower that room rate too much.