To the guests go the spoils
By Todd Pack
Sentinel Staff Writer
July 28, 2002
Dave Morris got a great deal on a hotel room this month near Disney World: $59 a night including a morning paper, coffeemaker, microwave oven, refrigerator, VCR, breakfast and a lift to the parks.
"It's nice," said the 47-year-old letter carrier from Indiana, vowing to never again pay a penny more for the same amenities -- or give up any of the perks to keep his rate low.
And that's what worries many hotel owners, who were forced to slash rates in the wake of the sluggish economy and then the terrorist attacks.
Because whether travelers are simply enjoying a little savings this summer or staying in hotels they couldn't afford a year ago, it's becoming clear that all this discounting has changed their expectations.
"A guest who pays me $59 now, I'll have to give him more to get him to pay me more, that's for sure," said Mike Cassara, vice president of the company that manages the Morris family's hotel, the Holiday Inn Hotel & Suites Main Gate East in Kissimmee.
Cassara isn't alone. Hoteliers throughout the country worry that tourists are being spoiled by the discounting that started a year ago then escalated after the Sept. 11 terrorist attacks. With fewer people traveling, hotels nationwide slashed prices to improve occupancy.
Rates picked up with the arrival of the summer travel season, especially in Orlando, but still lag behind last year's lackluster levels.
Locally, the average price of a room was $78.40 a night in June, according to Smith Travel Research, which tracks the U.S. lodging industry. June's average was down 0.4 percent from a year earlier and 2.1 percent from June 2000.
Occupancy was 65.8 percent, a 2.5 percent decline from the same month a year earlier -- and 16.7 percent from June 2000.
Such trends have driven down rates across the board. Some no-frill motels on U.S. Highway 192 have cut nightly rates to $18 while Disney's Grand Floridian Resort & Spa, one of Central Florida's most luxurious hotels, is offering residents a 46 percent discount this summer, charging just $129 a night.
So travelers may expect a certain level of service from now on, "even if they're not prepared to pay for it," said Peter Yesawich, president of Yesawich, Pepperdine & Brown, an Orlando tourism marketing and consulting firm.
"Whether it's a little nicer accommodation, free coffee or a free paper, those things will become conspicuous in their absence," Yesawich said.
Small, independent hotels may suffer the most because they have the least amount of money to spend on upgrades.
"We have to raise the bar, there's no doubt about that," said Janak Desai, a hotelier and past chairman of the Orlando/Kissimmee Hotel-Motel Association, which represents many of Osceola County's smallest properties.
One of his hotels, the Baymont Inn, where nightly rates start at $59 a night, already offers perks such as hair dryers, microwaves, refrigerators, voice mail and a "deluxe" continental breakfast in the lobby with cereal, waffles and French toast.
Desai's other franchise, a Knights Inn franchise, with rates starting at $39, offers only doughnuts, coffee and tea and juice.
But he said competition has forced him to install hair dryers, microwaves and refrigerators in about half the hotel's 64 rooms and consider expanding his breakfast menu.
But frills such as these don't come cheaply, Desai said. It costs $400 to upgrade the amenities in a single room and $2 to $3 a day per room for a deluxe continental breakfast -- a lot for a hotel that's still recovering from last year's sudden, sharp decline in business. But it's money well spent, Desai said.
"It's like HBO in the 1970s," he said. Commercial-free movies were a novelty a quarter century ago, a perk that could persuade guests to choose one hotel over another.
"But after a while, it became a necessity," and not one that people necessarily will pay extra to get, he said.
Leisure travelers, who accounted for the overwhelming majority of Central Florida's 43.3 million visitors in 2000, the last year for which figures are available, may be the most troublesome for innkeepers, said Chuck Ross, an analyst with Atlantic Hospitality Advisors in Valrico.
Business travelers may be enjoying nicer accommodations than their travel budgets usually allow them, but once rates return to pre-recession levels, they'll have no choice but to stay in more affordable rooms, he said.
"It's going to be a slow process to get back to where their expense reports aren't scrutinized as closely as they are now," he said.
But tourists, even those on strict budgets, have greater leeway in where they stay, Ross said. If they don't think a hotel is offering them a good deal, they'll simply stay someplace else.
That's already the case at many of Central Florida's tourist hotels.
Since the attacks, tourists are waiting longer to book rooms, in part out of fear but increasingly in hopes of finding last-minute deals. Clerks at midprice and budget properties say it isn't unusual for a guest to arrive then threaten to stay someplace else unless a cheaper rate is offered.
That frustrates Randy Larson, whose family owns the former Larson Inn Family Suites on U.S. 192. Rates at the independent hotel fell sharply after the attacks and still lag behind last year's levels, but "people would walk in and want to dicker with you," he said.
This spring, the family did a lot toward alleviating that and other problems, including low occupancy, by becoming part of a hotel chain.
They are now part franchisees of Park Inn, a chain controlled by Carlson Cos., whose brands include Radisson hotels and TGI Friday's restaurants. The family still owns the hotel.
Travelers generally expect more from chain hotels than independents and don't quibble as much about price, Larson said. Bookings also are up about 20 percent because the hotel is listed in Park's national reservations system.
The chain required the Larsons to offer certain amenities, such as a free continental breakfast, but that has only helped attract customers such as Dana Cattaneo, a substitute teacher from New York.
It wasn't the cheapest hotel on U.S. 192, but "we decided it looked nice and presentable," said Cattaneo, who stayed three nights at the Larsons' hotel with her husband and two sons.
William Crow, an analyst and vice president of Raymond James & Associates in St. Petersburg, expects more independents to follow the Larsons and join national chains.
"You see more conversions during bad times than you do during good times," he said. "If they can put a brand name on their hotels, they're guaranteeing themselves higher traffic."
But many of Central Florida's small independents can't afford the franchise fees and other costs of joining a chain, Desai said.
Larson's family, for example, spent about $150,000 to join Park Inn, with much of that cost going toward new signs and a breakfast nook. It also pays a monthly fee.
Cassara, whose company runs the 614-room Holiday Inn, thinks that, as competition increases, properties will be forced to spruce up their rooms and offer other perks, such as free local telephone calls, Internet access and possibly even curbside check-in to avoid long lines at the front desk.
"We just finished 400 rooms this year, putting in new carpet, bedspreads and drapes, and we're doing a small sprucing up of our lounge," he said. "It'll make it an easier sell."
Todd Pack can be reached at tpack@orlandosentinel.com or 407-420-5407.
Copyright © 2002, Orlando Sentinel
http://www.orlandosentinel.com/busi...072802jul28.story?coll=orl-business-headlines
By Todd Pack
Sentinel Staff Writer
July 28, 2002
Dave Morris got a great deal on a hotel room this month near Disney World: $59 a night including a morning paper, coffeemaker, microwave oven, refrigerator, VCR, breakfast and a lift to the parks.
"It's nice," said the 47-year-old letter carrier from Indiana, vowing to never again pay a penny more for the same amenities -- or give up any of the perks to keep his rate low.
And that's what worries many hotel owners, who were forced to slash rates in the wake of the sluggish economy and then the terrorist attacks.
Because whether travelers are simply enjoying a little savings this summer or staying in hotels they couldn't afford a year ago, it's becoming clear that all this discounting has changed their expectations.
"A guest who pays me $59 now, I'll have to give him more to get him to pay me more, that's for sure," said Mike Cassara, vice president of the company that manages the Morris family's hotel, the Holiday Inn Hotel & Suites Main Gate East in Kissimmee.
Cassara isn't alone. Hoteliers throughout the country worry that tourists are being spoiled by the discounting that started a year ago then escalated after the Sept. 11 terrorist attacks. With fewer people traveling, hotels nationwide slashed prices to improve occupancy.
Rates picked up with the arrival of the summer travel season, especially in Orlando, but still lag behind last year's lackluster levels.
Locally, the average price of a room was $78.40 a night in June, according to Smith Travel Research, which tracks the U.S. lodging industry. June's average was down 0.4 percent from a year earlier and 2.1 percent from June 2000.
Occupancy was 65.8 percent, a 2.5 percent decline from the same month a year earlier -- and 16.7 percent from June 2000.
Such trends have driven down rates across the board. Some no-frill motels on U.S. Highway 192 have cut nightly rates to $18 while Disney's Grand Floridian Resort & Spa, one of Central Florida's most luxurious hotels, is offering residents a 46 percent discount this summer, charging just $129 a night.
So travelers may expect a certain level of service from now on, "even if they're not prepared to pay for it," said Peter Yesawich, president of Yesawich, Pepperdine & Brown, an Orlando tourism marketing and consulting firm.
"Whether it's a little nicer accommodation, free coffee or a free paper, those things will become conspicuous in their absence," Yesawich said.
Small, independent hotels may suffer the most because they have the least amount of money to spend on upgrades.
"We have to raise the bar, there's no doubt about that," said Janak Desai, a hotelier and past chairman of the Orlando/Kissimmee Hotel-Motel Association, which represents many of Osceola County's smallest properties.
One of his hotels, the Baymont Inn, where nightly rates start at $59 a night, already offers perks such as hair dryers, microwaves, refrigerators, voice mail and a "deluxe" continental breakfast in the lobby with cereal, waffles and French toast.
Desai's other franchise, a Knights Inn franchise, with rates starting at $39, offers only doughnuts, coffee and tea and juice.
But he said competition has forced him to install hair dryers, microwaves and refrigerators in about half the hotel's 64 rooms and consider expanding his breakfast menu.
But frills such as these don't come cheaply, Desai said. It costs $400 to upgrade the amenities in a single room and $2 to $3 a day per room for a deluxe continental breakfast -- a lot for a hotel that's still recovering from last year's sudden, sharp decline in business. But it's money well spent, Desai said.
"It's like HBO in the 1970s," he said. Commercial-free movies were a novelty a quarter century ago, a perk that could persuade guests to choose one hotel over another.
"But after a while, it became a necessity," and not one that people necessarily will pay extra to get, he said.
Leisure travelers, who accounted for the overwhelming majority of Central Florida's 43.3 million visitors in 2000, the last year for which figures are available, may be the most troublesome for innkeepers, said Chuck Ross, an analyst with Atlantic Hospitality Advisors in Valrico.
Business travelers may be enjoying nicer accommodations than their travel budgets usually allow them, but once rates return to pre-recession levels, they'll have no choice but to stay in more affordable rooms, he said.
"It's going to be a slow process to get back to where their expense reports aren't scrutinized as closely as they are now," he said.
But tourists, even those on strict budgets, have greater leeway in where they stay, Ross said. If they don't think a hotel is offering them a good deal, they'll simply stay someplace else.
That's already the case at many of Central Florida's tourist hotels.
Since the attacks, tourists are waiting longer to book rooms, in part out of fear but increasingly in hopes of finding last-minute deals. Clerks at midprice and budget properties say it isn't unusual for a guest to arrive then threaten to stay someplace else unless a cheaper rate is offered.
That frustrates Randy Larson, whose family owns the former Larson Inn Family Suites on U.S. 192. Rates at the independent hotel fell sharply after the attacks and still lag behind last year's levels, but "people would walk in and want to dicker with you," he said.
This spring, the family did a lot toward alleviating that and other problems, including low occupancy, by becoming part of a hotel chain.
They are now part franchisees of Park Inn, a chain controlled by Carlson Cos., whose brands include Radisson hotels and TGI Friday's restaurants. The family still owns the hotel.
Travelers generally expect more from chain hotels than independents and don't quibble as much about price, Larson said. Bookings also are up about 20 percent because the hotel is listed in Park's national reservations system.
The chain required the Larsons to offer certain amenities, such as a free continental breakfast, but that has only helped attract customers such as Dana Cattaneo, a substitute teacher from New York.
It wasn't the cheapest hotel on U.S. 192, but "we decided it looked nice and presentable," said Cattaneo, who stayed three nights at the Larsons' hotel with her husband and two sons.
William Crow, an analyst and vice president of Raymond James & Associates in St. Petersburg, expects more independents to follow the Larsons and join national chains.
"You see more conversions during bad times than you do during good times," he said. "If they can put a brand name on their hotels, they're guaranteeing themselves higher traffic."
But many of Central Florida's small independents can't afford the franchise fees and other costs of joining a chain, Desai said.
Larson's family, for example, spent about $150,000 to join Park Inn, with much of that cost going toward new signs and a breakfast nook. It also pays a monthly fee.
Cassara, whose company runs the 614-room Holiday Inn, thinks that, as competition increases, properties will be forced to spruce up their rooms and offer other perks, such as free local telephone calls, Internet access and possibly even curbside check-in to avoid long lines at the front desk.
"We just finished 400 rooms this year, putting in new carpet, bedspreads and drapes, and we're doing a small sprucing up of our lounge," he said. "It'll make it an easier sell."
Todd Pack can be reached at tpack@orlandosentinel.com or 407-420-5407.
Copyright © 2002, Orlando Sentinel
http://www.orlandosentinel.com/busi...072802jul28.story?coll=orl-business-headlines
