Disney’s new hotel rooms send a strong travel recovery message

News that Walt Disney World is building it first new hotel in seven years is a sign of an overall travel recovery and, particularly, an upswing in the slumping hotel business.
 

Observers said the announcement was one of the strongest signals yet from Disney that it thinks a sustained recovery is underway.
 

Disney announced it would build 1,120 suites with room for as many as six people each, and another 864 traditional hotel rooms with a design theme based on some of its more popular animated movies.
 

“We’re feeling very positive about the demand that is interested in both the value products and the family suite product,” said Mark Rucker, vice president for lodging for Walt Disney Parks and Resorts.
 

Disney is obviously bullish on capturing some of the growing market for affordable suites aimed at families traveling with children or extended families.
 

But there are other signs that the US hotel market is turning around.
 

The US Hotel Industry Leading Indicator or HIL, showed another increase in occupancy last month, the second one in a row.
 

Occupancy rebounded for large, multi-brand hotel companies in the first quarter of 2010, but rate declines continued across all tiers, reported Marriott International.
 

Occupancy at Hyatt Hotel Corp.‘s 369 hotels rose year over year by 5.8 percentage points to 64.4 percent during the quarter.
 

Hyatt also reported occupancy increases in most North American markets.
 

“We have begun to see greater group booking activity, but we continue to have limited visibility on future bookings due to short lead times and smaller-sized bookings,” said Hyatt president and CEO Mark Hoplamazian.
 

The meeting business is also picking up.
 

“While corporate business remains soft, association meeting attendance took off,” said Marriott President and COO Arne Sorenson.
 

"While first-quarter room rates were generally lower than last year, as occupancy levels continue to improve, we see higher room rates on the horizon," according to Marriott. They are predicting hotel room revenues will increase by up to six percent this year.
 

In the case of Disney, its decision to build lower-priced hotel rooms was an indication that “travelers will continue the frugal spending habits many adopted during the downturn,” wrote The Orlando Sentinel.
 

Disney officials pointed out that since 9-11, families have taken to traveling in larger groups, often with extended members.
 

“Ever since 9-11, we just see a lot more family unity,” said Jim Durham, vice president for resort projects at Disney Imagineering.
 

By Kieron Keady