“Raise Your Rates!”
The quote came from FelCor Lodging Trust’s Chairman Tom Corcoran during his March 21, 2012 keynote address at the Hunter Investment Conference in Atlanta. Corcoran was responding to bullish industry forecasts from economists, financial consultants and hotel company executives.
Corcoran and other leaders affirmed that the recovery is underway, but that many revenue managers hired since 2008 have never seen a strong market. The overall feeling from operators and analysts was that now is the time to motivate revenue managers to trust their revenue management systems and be aggressive with pricing.
Tim Hart, an EVP with TravelClick, confirmed that group, transient business and transient leisure business were all up in rooms booked and rate. Hart said the most promising sign was that group business was back and getting stronger. Even the numbers guys were confident. PKF President Mark Woodworth reiterated PKF’s forecast, calling for a 5.8% boost in revenue per available room this year, led by a 4.1% gain in average daily rate.
PKF has reported six straight quarters of ADR growth, and with new supply limited, Woodworth said, “We are confident forecasting a sustained period of attractive industry profit growth.” PKF’s latest issue of Hotel Horizons projects occupancy gains through 2016, which would be an unprecedented six-year run of growth that began in 2010.
Lodging Hospitality magazine’s editor said the messages at Hunter — that revenue managers and operator should be confident and raise rates— were the same at other recent events, but this time they sounded far more real.
“I don’t think you can say it enough,” Corcoran said. “Now that you see recovery is here, be confident in pushing rates. I don’t care what people are trying to say. Yes, things are going to get better,” he said. “We are in a great part of the cycle. I think business is going to be extremely good.”