Pressure on hotel rates not likely to go away soon
June 04, 2009 |
Corporate hotel rates recently negotiated downward are unlikely to increase anytime soon, said several multibrand hotel company CEOs last week at New York University's International Hospitality Industry Investment Conference.
Noble Investment Group senior managing principal and CEO Mitesh Shah said on Monday the length of the current economic downturn, now in its 18th month and already longer than most recent lodging industry downturns, meant it would take time for hotel companies to bring corporate rates back to the levels reached in 2007.
Noble, which operates upscale hotels under Marriott, Starwood, Hilton, Hyatt and InterContinental Hotel Group brands, has seen corporate buyers push to lower rates, and they will have the ability to dictate pricing for a while, he said.
"They understand that if they are traveling, they're one of the very few traveling, so they've gotten very aggressive," Shah said. "That's not going to change until demand starts increasing."
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