Thank the recession. In particular, thank the business travelers. These guys are the backbone of the travel industry, racking up thousands of dollars in expenses a week, filling planes and paying full price because they don’t have a choice. I spent five years gripped by that lifestyle, and I don’t miss it. But, I did learn who keeps the travel market afloat, and it’s not you (and it’s not me anymore). Since these guys aren’t spending as much money as they did a year or two ago, everyone is suffering.
And, you could benefit from all this.
Hotels and airlines are offering fantastic deals right now in large part because the business travelers aren’t checking in the way they used to. An AP reporter, for example, nabbed a room at the Waldorf Astoria in Palm Springs, CA for $130 a night (including taxes). Oh, and it was the “Spa Villa.”
So, how bad is it? Smith Travel research pegs occupancy at North American hotels at 52.3 percent, down 10.3 percent from a year ago. Hotels’ average daily rates were down 3.3 percent on average, to $101.84. Hotels are half full (or, half empty?), and rooms aren’t fetching as much.
If you think it could be worse, it is. The real number that hotels watch is REVPAR – revenue per available room. Basically, take all the money a hotel pulls in for a day and divide it by the total number of rooms in the hotel (not just the rooms that are occupied). After all, every room – occupied or not – represents a chance for the hotel to make money. So, the true test of its performance is how well a property is doing relative to its entire inventory. This is the number by which hotels live and die.
It’s down 13.3 percent to $53.28.
So, if you expect Monty Hall to be at the front desk, you won’t be disappointed. They need to make a deal, and you stand to win big. As always, there is a catch. You may have to pay for your room before your trip and submit to draconian cancellation terms. If you can’t stomach such words as “non-refundable,” this market is made for you.