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Hoteliers will have to accept rate cuts
SINGAPORE – Leading Asian hoteliers tried not to mention the dreaded RD words – rate dumping – at ITB Asia.
But most agreed there would be pressure on rates next year, especially in the meetings market.
Miguel Ko, president Starwood Asia/Pacific, said it wouldn’t necessarily be the “big boys†who emerged from the global meltdown in the best shape.
“I expect the cards to be re-shuffled. Some companies will come out stronger, some weaker.â€
Ko expected consolidation of hotel groups, leaving “six or seven†big players.
Ko said it was important to retain “rate integrity†during a downturn and Starwood “would not be the first drop ratesâ€.
Michael Issenberg, chairman of Accor Asia/Pacific said there would be rate decreases, “especially in markets where we need to stimulate demandâ€.
“And when we go out to quote for conferences, yes, I expect room rates to drop.
“Also, if you are a banker, and suddenly your owner is a government, there is a perception out there that you will need to be more prudent, less showy.â€
Ko said that in the luxury sector, 60% of guests had their bills paid by someone else. “If Microsoft or Morgan Stanley is paying your bill, you will be very circumspect how you spend their money.
Singapore boutique hotelier Loh Lik Peng said rather than drop rates he would look at throwing in free extras – “such as a spa or meal vouchers – that way we keep our rates by adding valueâ€.
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