HotelNewsNow has an article this week, “W put ‘lifestyle’ on map 15 years ago,” sharing some insight into how W Hotels impacted the development of lifestyle hotels.
Interestingly the comments on this article point to Kimpton Hotels as launching this trend a decade earlier, but without the marketing power of SPG to push the concept into the public eye.
My first W Hotel stays were in 2003 at W Newark Silicon Valley (now an Aloft hotel) and W Sydney in Woolloomooloo (now a Taj Hotel).
Since then I have stayed at W San Francisco, W Chicago Lakeshore, W Washington D.C. and W New York Union Square. I have also visited a couple other W Hotels.
Lost W Hotel of Woolloomooloo (8-26-2012).
My hassle-free stay @W New York Union Square (10-5-2012)
W Silicon Valley, Newark, California (5-30-2011)
W Silicon Valley Fly-by in HD (July 28, 2009) – This piece touches on the adjacent wildlife refuge and history of sea salt production in San Francisco Bay.
W San Francisco in HD (Sep 4, 2009) – Loads of photos
My Square Foot – Are Hotels Like Men? (8-30-2010) – commentary on W San Francisco room size.
W Chicago Lakeshore Hotel (Oct. 26, 2010)
W Chicago City Center in Blue Ray (October 27, 2010)
W Barcelona Extreme WOW Suite (9-19-2012)
Where are hotel rates climbing in the USA? Where are rates dropping? Hint: not many places.
HotelNewsNow.com hotel industry data from Smith Travel Research confirms one fact about hotel rates that I had intuitively discovered by my own observations: San Francisco hotel rates skyrocketed faster than any other location in the US in 2012.
Smith Travel Research (STR) is the Tennessee based hotel data industry firm. Many of yesterday’s statistics from the pwc report I cited in Thoughts on Europe 2013 pwc hotel forecast were based on STR data analysis. STR and STR Global data is published in industry reports and through their media outlet HotelNewsNow.com. Data published below is from Smith Travel Research hotel industry presentations. Read More…
Airfares hit record highs in 2012. Car rental rates have steadily climbed despite high gas prices. Yet, hotels in September 2012 have an average daily rate at $105.10 in the U.S. and still lag slightly behind their September 2008 peak rates of $107.71.
2007 Q3 saw a peak in airline passenger travel with 203 million flyers. Four years later in 2011 Q3 the airline passenger level is 4% lower than 2007 peak. Average airfares in 2012 Q1 were the highest in eight years.
Car rental revenues in 2011 were the highest in 11 years and increased 8.8% over 2010 rates. There were 1.8 million rental cars in service in the US in 2011. Monthly average revenue per car was $1,060.
The point of the HotelNewsNow article with all this comparative data is to imply hotels should be able to increase room rates and get more money from consumers who obviously are willing to pay more for airfare and car rentals.
Sounds like a leisure traveler squeeze to me.
In 2012 I watched rates go through the ceiling in San Francisco, New York, Miami, Hawaii and I have to think that with corporate profits going up and middle class income going down, many leisure travelers are still facing the fiscal cliff of reduced vacation affordability.
That is why I think it is even more important as we move into 2013 to know where the deals are and how to save money on the key travel vacation components of hotels, airfare and rental cars.
This TravelPulse article indicates Europe may be where the hotel travel bargains are found in 2013.
Frequently I state that the commission an online travel agency (OTA) like Expedia and Travelocity takes in a hotel booking is about 20 to 25% of the room rate charged to the consumer. Hotels pay the OTA for their room bookings. The consumer rarely gets a cheaper room through the OTA compared to the hotel chain’s website.
This is the reason why most chain hotels do not offer loyalty program points or promotion credit for bookings through OTAs. And this is why the hotel chain can afford to run high-value points bonus promotions to drive bookings through the chain’s website. The consumer receives hotel loyalty program benefits rather than the OTA taking profits from the hotel for hotel rooms. OTAs generally do not give the loyalty program member the rebate value available through direct bookings with the hotel chain.
An article from HotelNewsNow.com states the OTA commission has gotten smaller with brand hotels paying about 15% of room rate and independent hotels about 20%. Online travel agencies do not have the bargaining power in 2012 as the global hotel industry has picked up and room rates have climbed higher.
Another potential change for 2013 is rate parity between OTAs and hotel brand websites may be ending due to “price-fixing” lawsuits in Europe.
All the hotel chains offer Best Rate Guarantees and so do the online travel agencies. The fixed hotel rates make Best Rate Guarantee claims a valuable discount for my travels since most chains discount a valid rate discrepancy by taking 10% to 25% off the lower rate.
What will be the effect on hotel loyalty programs if online travel agencies can undercut the hotel chain’s own room rates?
Seems to me like the hotel loyalty promotions would have to get better to keep consumers booking directly with the hotel chain rather than booking lower rates through online travel agencies.