Nilesh GSummer Travel costs more (LINK)
May 29th 2008 02:44
Thanks to the higher gas prices,summer travel this year is not going to be fun.Its unbelievable that gas is above $4 a gallon and still going higher.Food prices have already been all time high.Job market has its own story and unemployment rate is not going down as we thought.
With this type of economic situation,hotel market is NOT going to perform well either.I mean I am not saying nobody is going to travel or use lodging facilities across the country at all,but it won't be "as fun as used to be" type experience.Not to mention,with every other price going up,hotel rates are going up and thats acting against the industry.
Usually,hotel's ADR(average daily rate) is based on the ratio of total room revenue divided by how many rooms are rented in a day.If we try to assume same occupancy level(rooms rented) last year,with ADR increasing,revenue should increase too but with rate increasing,occupancy will most likely decrease and casue total revenue go down.
Its going to be a problem for not only hotel owners/operators but also customers.share your views.
With this type of economic situation,hotel market is NOT going to perform well either.I mean I am not saying nobody is going to travel or use lodging facilities across the country at all,but it won't be "as fun as used to be" type experience.Not to mention,with every other price going up,hotel rates are going up and thats acting against the industry.
Usually,hotel's ADR(average daily rate) is based on the ratio of total room revenue divided by how many rooms are rented in a day.If we try to assume same occupancy level(rooms rented) last year,with ADR increasing,revenue should increase too but with rate increasing,occupancy will most likely decrease and casue total revenue go down.
Its going to be a problem for not only hotel owners/operators but also customers.share your views.
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