This article comments on the fact that travel has begun increasing again, even though the economy is increasing at a much slower rate (nearly half). “Spending on airplane seats, hotel rooms and rental cars, among other tourism and travel expenses, jumped 3% at an inflation-adjusted annual rate in the second quarter, the government said Thursday, while the economy as a whole grew only 1.6%.” (Murray) This is due in great part to the changes that businesses are making in the recession, a common theme that I have addressed in my previous blog posts. “Much of the increase is fueled by businesses, which reduced employee travel during the darkest days of the recession and are now once again deploying those road warriors.” (Murray)
This increase is a sign to hotels that their business may be increasing in the coming year, and that they should raise prices accordingly. However, many businesses are still afraid, and with good reason. “Room rates… slipped 1% because many hotels remain hesitant to raise prices.” (Murray) Raising prices is a risky endeavor, and if business does not increase as is expected, the hotels could risk bankruptcy, as is already a common theme in the hotel industry. However, I personally take the increase in spending on travel expenses and other luxuries to be a good sign, and it is definitely a positive occurrence for the hotel, restaurants, and leisure industries.
http://online.wsj.com/article/SB10001424052748704062804575510190736435952.html?mod=WSJ_Hospitality_leftHeadlines
I definitely agree that the increase in business and corporate travel is a good sign for not only Hotels, but also the Restaurants and Leisure Industry. If corporate travel is on the rise, I would say that it is a good sign for hotels to begin raising their prices, or maybe work in collaboration with restaurants in order to ensure business.
ReplyDelete