Occupancy revival on the anvil?


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The Wall Street Journal reports that the adroitly named Oracle corporation that quarterly profit for the technology giant “jumped 12% and sales exceeded its expectations, a sign
that corporate technology spending may be poised to rebound from one of
the sector’s worst-ever slumps.” It is not hard to connect dots that would indicate it as being good news for the larger economy including the overall travel industry.

Hints of a revival in travel have graced the pages of newspapers and internet forums both in the US and outside. Some of these pronouncements are from companies heretofore reticent if not downright pessimistic about prospects of a revival. These include American Express whose executives are quoted as saying that “airfares and international business travel saw
modest sequential increases in the third quarter, a sign of hope the travel
sector may be stabilizing after a prolonged decline.” The data underlying that conclusion were culled from American Express’ purchase information. However, AmEx’s travel executive, Christa Degnan Manning,  also noted that “hotel rates continued to weaken from the year earlier, down 10%
internationally and 2% in the U.S. Domestic hotel rates strengthened 7%
sequentially. and went on to add that “since hotels cannot reduce capacity as easily as air or ground transport
providers, this drives rates down, and the effect will likely continue through
the first half of 2010.” No surprise to hotel owners and operators but an uptrend in travel could arguably push rates up meaningfully in the second half of 2010 if the economic recovery is tangible and sustainable.

Other news items  along the preceding lines include Continental Airlines report that “it flew more passengers on fuller planes in November, although passengers paid less for each mile.”  Further, Continental
said “systemwide traffic rose 2.9 percent to 6.77 billion revenue
passenger miles, from 6.58 billion revenue passenger miles a year
earlier.” United Airlines had similar tidings as a report in the Wall Street Journal has a quote from  G;enn Tilton, CEO of UAL that they are “seeing a steady upward trend in ticket bookings going into the new

Individual US states also had some cheery stats as was the case with Florida per Smith Travel which noted that “an increase in hotel occupancy at Florida’s big beach counties, like Miami-Dade, and Palm Beach..” And on a long overdue front, a Reuters report carried by Forbes notes quoting IATA that “premium airline seats are
starting to fill up again after business travel plunged 18
percent in the first ten months of the year compared with the
same period in 2008.” All in all a cause for cautious optimism as the New Year comes around.

Republished with author's permission from original post.

Vijay Dandapani
Since August 1993, Vijay Dandapani, the President and Chief Operating Officer of Apple Core Hotels, has been instrumental in the company's growth and development, including acquisitions, six hotel renovations and the implementation of state-of-the-art computer systems. A hotel industry veteran, Dandapani, is also a member of the Board of Directors for the following associations: Hotel Association of New York City, NYC & Company, NYSHTA (New York State Hospitality & Tourism Association), and the International Hotel Motel & Restaurant Show at Javits.


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