Excerpt from CoStar

As the hotel industry navigates periods of lower demand from travelers, many hoteliers are optimistic about the prospects to boost revenues and capture more business and group travelers.

Hotel demand across the board has been falling short of expectations in 2023, according to hoteliers, but they are hoping that a rise in business and group travel will help soften the landing of lower demand during the shoulder months.

Some hoteliers are leaning on maintaining rates while competitors choose a more aggressive pricing strategy. Others are focused on generating an optimal mix of business.

“It’s important to continue to be agile in strategy and generating a good mix of business as we have seen the impact of increased flexibility in group rates leading to increased occupancy and while leisure travel has been broadened by the re-opening of major markets, guests are still likely to visit to locations that have been on their radar either traditionally or are still willing to try new places,” said Larry Crosby, general manager of The Foundry Hotel.

Leaders in the industry shared how they are preparing for the fall months.

Erica Lipscomb, Senior Vice President of Revenue Strategy, Crescent Hotels & Resorts 

“I am moderately optimistic for the remainder of 2023. Leisure demand is softening in destination and resort locations as international travel rebounds; however, group pace remains strong with continued growth in ADR across the portfolio and we are seeing steady growth in urban markets.

“Leisure demand will normalize to historical seasonal patterns. The impact in the fall will be unique and market specific as group demand continues to rebound along with business travel.

“Business and group travel will offset leisure demand as segments normalize. We continue to monitor the potential impact of the volatile economic environment on companies’ travel budgets.”

Patrick Broderick, Vice President of Sales and Revenue Management, Davidson Resorts 

“Demand has definitely fallen short of expectations in 2023 for every month so far since March. For destinations and resorts, there has been downward pressure on ADR as a result, especially in top destinations such as Orlando and Miami.

“[There’s] no real optimism for an improvement in 2023 as RevPAR growth has plateaued, and the transient segment is slowing overall with a return to traditional seasonality. Group has been the only savior and some signs of life with business travel in suburban and urban locations. In the U.S., we have the most open and competitive travel landscape since pre-pandemic. [However] international travel continues to go outbound to countries previously off limits [and] cruise lines [are] fully operational, [causing] continued softening in leisure demand for fall 2023.”

Anton Moore, General Manager, Gansevoort Meatpacking

“I am absolutely optimistic for this fall. Within the New York market, the demand is definitely there. The competitive landscape with the increased amount of inventory has impacted the ADR overall. New York City has seen an increase in new hotel openings this year, which impacted our ADR growth in 2022. I’m optimistic that our corporate group will be strong in the fall, supported by high-end leisure travel during the weekends.”

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