Recently, the Global Business Travel Association (GBTA) reported that business travel will grow 4.3% in 2012 and reach $260.9 billion. The U.S. Travel Association is expecting a slightly smaller increase of about 3.3% which they attribute to general anxiety over the economy and the upcoming election. But, both of these forecasts are good news for the lodging industry which is recovering from a steep slide that took place during the recovery. In addition, lodging operators are expected to employ the latest marketing techniques to get ahead of the competition.
Experts also think that as we move closer to the election, fewer pieces of legislation will pass. This will result in more confidence about the direction of the economy and increasing business travel at the end of 2012.
As business travel has slowly recovered, industry operators are seeing transient demand from customers who want good value. Operators expect to add more services and to emphasize value in order to resist price cutting in 2012. This trend is especially true in the lodging industry. Research shop PKF predicts lodging industry supply will increase 0.7% while demand should rise 3.1% During the year, about 368 new hotels will open and this will add 40,070 rooms to the inventory.
This year, the overall lodging market occupancy rate will average 61.4% which is a 4.5% improvement over last year. The Average Daily Rate (ADR) will be $101.16. Urban locations enjoy a 68.5% occupancy rate. And luxury hotels are most in demand with a 69.6% rate.
To compete by location and sector, lodging operators are promoting residential conference center meeting facilities. For the most part, these operators can tap specific customer groups to secure bookings. About 33% of meeting space demand comes from business organizations and another 33% comes from academic organizations.
Industry research shows that customers are willing to spend time online to secure deals on their travel needs. As a result, operators should invest in social media efforts. Lodging suppliers have also had good results using flash sales to fill empty rooms and this trend is expected to continue to in 2012.[Source: 2012 Meetings Industry. PCMA.org. November 2011. Web. 22 Nov. 2011]