Austin Hospitality Blog

1. PCI Compliance and Certification
PCI compliance and certification is number one on the priority list for 2010 because of the consequences of non-compliance.  The PCI standards guidelines stipulate that by July 1, 2010, all credit card acquirers must ensure all merchants that use payment application software, utilize only hotel software systems validated as compliant with the PCI, PA-DSS requirements.  This is a top priority because operators risk penalty fines if they are not certified compliant by the deadline.  Unlike chain properties, independent operators must handle the PCI issue themselves with the help of their tech providers.  NORTHWIND’s Maestro Property Management Suite is fully PCI PA-DSS certified to support operator compliance, and NORTHWIND also provides professional property PCI audit assistance.

2. Direct Website Bookings and eMarketing to Lower Costs
Direct website booking capability is becoming an important strategy for independent operators to market themselves, stay competitive and control booking costs in 2010.  When an online booking engine is fully integrated and developed by the property management system (PMS) provider, as with Maestro’s ResWave solution, it can accurately sell last room availability and show real-time optimized rates across all channels for maximum profitability.  The system must also provide a seamless GDS interface to capture third-party online reservations. With Maestro’s eMarketing tool, all customer emails and relevant data can be consolidated from all channels (GDS, POS, CRS, Call Center, etc.) to drive reservations direct to the hotel website booking engine and lower costs per booking.  It is important to note that when vendors add a booking engine to their PMS ‘at no cost,’ or offer a self-hosted solution, there are often costly fees associated with remote hosting, system maintenance, and online travel agencies (OTAs) transactions.   Booking engines that are self-hosted are also required to be PCI PA-DSS compliant.  As a result, operators must require vendors provide verification of PCI compliance for both their booking engine and PMS.  Maestro’s hosted Web booking engine alleviates this requirement to reduce the operators overall PCI obligations.

3. Focus on Total Guest Experience to Increase Loyalty and Referrals
Personalized service and a positive guest experience will be king in 2010. When properties anticipate a guest’s needs and deliver personalized service, the result is repeat business and profitability.  The most effective way to deliver high-touch service is with a robust, easily accessed guest database that is integrated with the property’s PMS to get a 360 degree guest view at every touch point. The Maestro Property Management System provides over 20 integrated modules that utilize one centralized database that records every guest transaction and request across a single property or multi-property hotel group.  A property team can leverage this information to deliver amenities and intuitive, personalized service that builds loyalty, increased spending and referrals.  Savvy operators should use BI tools such as Maestro Analytics to view in-depth reports, spending patterns, determine most valued services and create highly targeted lists for effective email and direct mail campaigns. Effectively targeted campaigns will attract guests based on their guest profile, stay patterns and activity preferences to fill rooms during seasonal soft periods.  When promotions are intelligently designed and personalized to guests that are most likely to respond, guests feel valued, revenues go up and everyone wins.

Further, Maestro’s integrated GEM (Guest Experience Measurement) module enables operators to automatically send online comment cards to capture departing guests’ perceptions. The survey results are stored in the guest’s history record for easy access during check-in. GEM’s detailed reporting provides operators with valuable predictive and actionable intelligence to keep guests coming back, increase up-sell and resolve issues quickly.

4.  Yield Management and Revenue Management to Maximize Profits
2010 will be a year of recovery for the hospitality industry.  As with the post 9/11 turnaround, operators who utilize effective yield management and revenue management systems will lead their comp-set with higher RevPAR in 2010.  The Maestro PMS includes a fully-integrated proactive yield management system that lets operators and hotel management optimize rates for all segments across all reservation channels, including OTA’s to create and maintain smart revenue strategies without resorting to emotional rate slashing tactics.

5.  Social Marketing Essential in 2010 for Hoteliers to Stay Connected
How we stay connected is changing and experts agree social media is here to stay. Today’s guests are communicating with friends, family, colleagues, and companies they do business with online through Facebook, Twitter, and other social media channels.  In 2010, the most successful hotels will reach guests and create brand advocates by using social marketing tools and channels to grab the attention of new visitors and keep in touch with their loyal client base.  Learning to create and execute effective social marketing programs may not be easy, but Maestro is ready to help.  Maestro’s Web Connection suite of online revenue generating tools leverages viral marketing features such as email ‘forward to a friend’ and ‘Share This’ plug-ins as well as icons and links to social media sites like Twitter and Facebook. Maestro also develops custom guest and group landing pages that connect online shoppers with track able Web pages offering unique promotions that increase occupancy while boosting referrals and loyalty.

With the growth of email marketing bombarding inboxes, it’s time to get smarter and more creative as to how you use this marketing method. Here are a couple of ideas to think about coming into 2010 that will help you generate some other ways to look at this medium.  Promote Guest Reviews:

Travelers today are placing more value on user-generated content than ever before. This means they are spending more time on review sites like TripAdvisor to see what other people are saying about your property, and using this intelligence as the basis for making a reservation or not making a reservation at your property. As hotel email marketers, maybe it’s time to ask your guests what they thought after their stay, and use these results to build more targeted messaging as well as increase brand loyalty.

So how does this work? To build up a database of guest reviews, set up an automated system that sends a message requesting a guest review of your hotel two weeks after their stay. This gives you an opportunity to connect on a couple of different levels. First, you get some honest feedback as to how you are performing as a hotelier, and secondly you learn more about individual personality traits that can help you craft more targeted and engaging messages in the future. Asking guests for reviews after their stay can also increase brand loyalty because you are demonstrating that you care about their experience at your hotel.

Web Analytics:

As hoteliers, do you really know how many guests you lost while they were trying to make an online booking? Did they leave because they thought the booking process involved too many steps? What are you doing to try and reach them before they totally abandon the booking process? This is where web analytics and email can be used in conjunction with one another. Let’s say a guest comes to your property website and abandons the transactions before completion. You can use your analytics to trigger an email message asking them to return and try again, or refer them to an online help option. Studies have shown that being there for the guest and reaching out at that point of need will increase conversion rates.

Examine your Database:

Take another look at your email database and don’t assume that you can treat everybody the same. You are guaranteed to have different levels of engagement. But to further engage and generate improved return on investment, you will need personalized messaging that targets specific segments. Here’s where you need to start. Try splitting your lists into three separate groups each with unique goals that align with guests’ mindsets.

• New guests:  email recipients who have expressed some desire for communication. You will need to develop messaging to welcome them as new guests, and provide them with useful information and promotions for their first stay.

• Repeat guests:  guests who are already actively involved with the brand. They have stayed at the property many times, have signed up for the newsletter, and have received information on special deals. This group needs an email that is more transactional-based. The message needs to focus on more up sell or cross-sell offers and special promotions for loyal customers.

• Lost guests: People who have stopped opening and clicking your messages and who no longer stay at your property. This group needs surveys that identify reasons for lack of engagement, incentives to visit the web site again, and promotions to encourage future bookings.

Predict when the recipient is looking at their inbox:

When is the best time to send an email? This question has been on the minds of hotel email marketers for years. Is Tuesday better than Thursday? I think everybody has a view on this but it really is nothing more than a view. Now there is technology out there that can analyze recipient behavior and predict the ideal email delivery time for each address on your mailing list. The system then delivers your message to the recipient’s inbox at the precise day and time they are most likely to be looking at their inbox. By reducing the chances of an email getting lost you will increase your chances of increasing your open, click-through and conversion rates.

Hopefully, these tips will help you think about email marketing in a different way as you approach 2010. It’s not just about crafting a great offer and sending it out to the universe, it’s about using this tool in a more ‘social way.’ Use it in a way that’s helpful to your guests. Be there when they need you and you will increase your bookings naturally.

2009 will be forgettable – at best – for many of the nation’s hoteliers, from a disastrous first quarter to what is shaping up to be a less-than-robust recovery as 2010 fast approaches.  Although we aren’t pessimistic about the future state of the hotel industry, we also don’t believe that the New Year will bring immediate relief.  There is no miracle cure; hotels and resorts will likely grapple with depressed demand, lower rates, and anemic revPAR and occupancy figures for some time to come.

We do believe, however, that 2010 will present at least as many opportunities as challenges.  The recovery will lean favorably on innovators.  Forward thinkers, cautious optimists and those lodging enterprises that embrace a progressive philosophy will be well positioned for ongoing success.  If we’ve learned one thing from this year, it is time to move from traditional methods used in our industry to more effective, more efficient ways.   That is the only way the hotel industry can move forward.

In the absence of a crystal ball, below are our predictions for 2010 based on how we see the state of the industry at the end of 2009. These reflect a cautious optimism for the year, and highlight some areas we see as being very important as we begin a new decade and a new dawn for hotel operations.

Less is sometimes… less

Despite the recovery, hoteliers should be prepared to do more with less this coming year.  Guests are likely to be stubbornly slow to return, at least not at the same rate enjoyed by the industry following the early-00’s recession.  Occupancy levels for the 4th quarter of 2009 are projected to come in below 2008 levels, according to PriceWaterhouse Coopers, setting the stage for a lackluster start to 2010 in terms of occupancy (the report estimates a 55.2% occupancy rate for the 2009 fiscal year, well below 2008’s 60.3%).
Considering these occupancy figures and the current credit environment, working capital (both operational cash flow and from borrowing activity) will be constrained, as demand and commercial lending continue to be elusive.  Hotels and resorts will have to optimize what they already have in 2010; in terms of guests, this means putting a premium on incremental revenue derived from existing clientele; in terms of capital and infrastructure, it means maximizing revenue per existing square foot.

Though high unemployment suggesting a strong pool of applicants, hotels’ staffing levels will probably remain well below what would have been considered normal just a few years ago.  This will put pressure on managers to improve their systems, to relieve the operational burden on short staffs.

Auto, Automate, Automation

The staffing situation will highlight the importance of automation in key hotel systems.  Though hotels may be cautious about investing in systems and software in this environment, automation in specific departments – particularly the revenue management department – can increase revenue per available room and ADR, and free up revenue management staff for proactive revenue management planning.  Automation is a winning strategy for 2010.

RevPAR Resurgence

2009 was the year of salvaging occupancy, a trend best embodied by substantial discounts and rate cuts by the major chains.  In 2010, as occupancy slowly picks back up (PwC predicts a rise in occupancy across the US to 55.8% for 2010), the emphasis will be more on revPAR, than lose-lose price wars.  This follows the logic of doing more with less; the demand in the 2010 market will be such that artificial occupancy optimization measures (like deep discounting) will be unsustainable, making revPAR the metric that matters.  And with revPAR off more than 16% off last year, this will happen not a moment too soon.  Look for hotels to do all they can to bolster their revPAR figures, from improving or updating their revenue management systems to offering new ancillary services.

Building for a Recovery

Hotels should get back to making what investments they can in revenue-generating initiatives in the New Year.   2009 was a mixed bag in terms of capital expenditures for hotels.  A slight surge in fitness center construction and renovation occurred at the end of 2008, which was both a response to guests’ desires and created the potential for increased incremental revenues in the next 1-5 years.  On the other hand, Starwood scaled back its capex for the whole of 2009. For many hotels, however, the recession-created lull in occupancy created an opportunity for development for the future.  Look for this trend to continue into next year.

Supply Pipeline

Lodging supply actually grew in the third quarter of 2009 (again according to PwC, which revised its room supply prediction to 3.2% growth for 2009).  While this indicates a trend upward, there is not likely to be a substantial upsurge in new hotel construction as 2010 opens.  The pipeline of new room inventory, according to Smith Travel Research, is still intact, but only producing a trickle of new rooms coming online.  This is actually trending up, but only slowly, and it is doubtful that 2010 will see a sudden influx of new hotels (the availability of financing for new construction is unlikely to improve until the latter half of 2010 at best, further limiting inventory increases in many markets).

ADR Rising

US average daily rates are, as might be expected from the published occupancy and revPAR predictions, forecast to increase slightly in 2010. Business travel, hit particularly hard by the recession, is poised to make a comeback in 2010, though probably not to 2007 levels.  This, coupled with hotels’ decreasing reliance on deep discounting to boost occupancy, will lead to higher average daily rates. Higher ADRs, along with occupancy optimization through effective revenue management, will in turn lead to improved revPAR and a recovery for the industry as a whole.

Information is King

Efficiency seems to be the watchword of every year, but for 2010 it is an imperative, and the only way to the type of industry-wide recovery we mentioned above.  Efficiency in the internet age is particularly crucial to the effective leveraging of available information, particularly to improve rate setting and establish a competitive edge in any given market.

Revenue management systems that use information on competitors’ rates- in a geographical area, not just within a comp set- as a basis for optimal rate adjustment will continue to gain favor.  These systems will help hotels use available information to the greatest possible advantage, and help separate the leaders from the laggards in 2010.

Bit by Bit

In terms of revenue management – particularly over multiple online channels – the smallest variations in the offered rate can make the difference between optimized occupancy and revPAR and leaving money on the table.  In a slow-recovering 2010, hotels will become increasingly attuned to the benefits of real-time rate adjustment, and invest in automated systems that can optimize rates on a moment-to-moment basis.  This sort of incremental revenue enhancement will be the hallmark of innovative, efficient hotel operations that will thrive in the next 12 to 18 months, and allow them to differentiate themselves from their competitors in the only way that matters.  On the P&L.

As with all forecasts, our predictions for 2010 may be end up being different to reality.  There is still so much uncertainly pervading the global marketplace, and the lodging industry is no exception.  We may yet enter a double-dip recession, or the so-called jobless recovery may prove too tenuous to support many hotels.  We maintain, however, that the New Year will be dominated by revenue management optimization, a return to healthier occupancy and revPAR levels, and weak but not nonexistent demand.

More than anything, we think that innovative properties and chains will eke out a considerable competitive advantage over their lagging peers. There are always opportunities, after all.  In 2010, the key will be seizing them when they present themselves.

Are you tracking the return on investment from your website? Do you know how many visitors your site receives every day? Are you analyzing the metrics on the pages they viewed, the time they spend on your site, and the exit pages? Do you know how they were directed to your site?

If you have analytics installed on your website then you have access to this information. However, our research this month revealed that 41.8% of New England first class and luxury hotels don’t have analytics on their website!

What is Analytics Software?

Analytics software is a tool that gathers information about how people find your site, how they navigate through it, and how they become customers. You embed a JavaScript code into your web pages which will collect data from your users. You will then be able to view and analyze a great deal of data including how people entered your site (i.e. a banner ad, an article, or the search engines), what pages they visited, how long they spent on your site, what pages they exited on, what percentage of people left your site quickly (bounce rate), what content and keywords are most successful, and much more.

There are many software packages available, but the most popular are Google Analytics, Webtrends, and Omniture. Google Analytics is a very effective software that covers all the basics of tracking, and it is completely free. Omniture and Webtrends are paid software which will allow the user to delve deeper into the analytics and are best for very large e-commerce sites.

We recommend hotels use Google Analytics because it is a quality software that will provide you with a high-level of data at no cost. If your hotel brand has hundreds of properties, or a large complex website, you may consider paying for Omniture or Webtrends, however those sites may be overkill for most properties.  For purposes of this article we will focus on Google Analytics.

Why Does My Hotel Need Analytics?

If you aren’t tracking your website and internet marketing efforts you will never know if they are effective or what your return on investment is. You should decide what to track, set goals, and create reports that show how results tie back to goals. Below is an outline of why your hotel should use analytics:

Analytics can help your hotel detect problems with your website
Tracking allows you to analyze user behavior on your site which will help you identify if there are any problems on your site that need to be fixed. Analytics will tell you what the most popular pages on your site are, the average time users spend on each page, the pages a user visited before and after, and where the user exited your site. It will also show you the bounce rate which is the percentage of people who entered your site but left immediately without looking at other pages or links. If you analyze this data you can learn a lot about the content of your website and what works and what doesn’t.

If a user is on your site and proceeds to the reservations page, but then exits before booking, perhaps there is a problem with the reservations page. Maybe it is too difficult to use, or there is a trust issue, or the user was distracted by a link. If a certain page has a high bounce rate, or exit rate, you should also analyze the content on that page. Ideally you want users to exit only after they have booked or made some other conversion such as providing you with their e-mail or downloading a PDF.

Make sure your booking engines can integrate Google Analytics. Some booking engines have their own tracking system which can help hotels see conversions from PPC ads and other sources. However these systems may not allow you to track what users are doing on your site, or where they are clicking. Therefore you aren’t able to detect potential problems with your website.

On a technical note, you can also see what type of computers and web browsers your visitors are using and test to see if your site functions correctly within those browsers.

Analytics will show your hotel how people are directed to your website
If you aren’t tracking your internet marketing efforts such as your search engine optimization strategy, PPC campaign, banner ads, e-mail campaigns, or press releases/articles, then you will never know if they were effective. Google Analytics will show you exactly where your traffic came from. You can see the percentage of direct traffic (when the user directly types in your URL), traffic from referring sites (links from articles, social media sites such as Twitter, LinkedIn, etc.) and traffic from the search engines such as Google, Yahoo and Bing.

You can also link Google Analytics to your AdWords account to track your PPC campaigns. Once linked, Analytics will automatically tag your AdWord links for detailed campaign tracking reports. You must manually ‘tag your links’ on all your banner ads, e-mail campaigns, and newsletters so they can be tracked by Analytics. You can learn how to do this on the Google Analytics help page. You do not have to tag links from referral sites because Google Analytics can detect the site automatically.

Analytics will help your hotel learn about its audience
The visitors reports can show you what countries and cities your users are from, and the languages they speak. This can help you identify where your target audience is, and help you make decisions on your campaigns. Perhaps you have a lot of visitors from local areas, but not enough nationally. Therefore you may decide to do a national campaign. If you see there is a high percentage of Spanish speakers looking at your site, you may want to make want to make your site available in the Spanish language.

Analytics will tell you which keywords are most effective
The  keywords report will show you overall trends regarding your keywords. You can see which keywords drive the most traffic to your site, and more importantly, which keywords direct users to your site who then make a conversion (take an action you have specified in your goals, such as make a reservation, download information, or submit e-mail). It is important to look at the words that lead to the highest conversion rates as opposed to the ones that drive the most traffic. You should also look at the words that have the highest bounce rate, perhaps users find your site is not relevant to that word.

In 2009, social media Web sites completed the transition from being a source of procrastination for young adults to a mainstream cultural phenomenon. With Twitter-and to a slightly lesser extent, Facebook-leading the way, 2010 will see social media become firmly entrenched as a powerhouse marketing platform. At both the brand and property levels, even the most conservative of hotel companies are dipping their proverbial toes into the social media waters.

As social media becomes more and more commonplace, expect companies and consumers alike to continue exploring interactivity in greater depth. Social media gives hoteliers an incredibly inexpensive way to build brand awareness, while doing it in a way that makes the brands seem simultaneously hip, down-to-earth and fun.

A great example is Caesars Palace Las Vegas’ Trick or Tweet promotion in October. Using its @CaesarsPalace Twitter account, Caesars Palace tweeted locations on property for followers to visit within a certain time frame. For guests who played along with the real-time, real-life social media scavenger hunt, the hotel gave away prizes.

Savvy hoteliers are increasingly using social media to let guests sell the hotel to other guests, which is authentic marketing at its best. For instance, Dolce Hotels and Resorts held a Facebook contest in November that invited fans to propose dream vacations at its Dolce Hayes Mansion, California. The best of the submissions were then posted on Dolce’s Facebook page for fans to vote on a winner. The prize: the very dream vacation proposed by the winner.

In a slightly edgier version of the same coin, MGM Grand Las Vegas in November asked followers of its @mgmgrand Twitter account to tweet their “sins,” using the #mgmsin hashtag, with one participant selected at random each day of the month to win a free room night.

What a brilliant promotional premise: Get the public thinking and talking about your brand, your destination and all the fun (and scandalous) things they could do while there, then just sit back and watch the conversation mushroom organically.

Here’s a tip: Tip your housekeeper!

“Maybe once a month someone will tip, but what can I do? We can’t force people to tip,” says Sara Hana, a housekeeper at the Victory Inn in Roseville. “Sometimes they leave empty bottles.” Of all the workers travelers encounter, hotel maids are most likely to be stiffed at tip time. Often unseen by guests, they are known only by the crisp pillows they plump or fluffy towels they hang. “Sometimes they slip under the radar, but they are incredibly deserving,” says Dan Post Senning of the Emily Post Institute in Burlington, Vt. “They deserve a tip of $1 to $3 a day.” The nation’s 433,000 hotel maids (also called housekeepers) make a median wage of $9.42 per hour, according to the U.S. Bureau of Labor Statistics. But at modest hotels and motels, they are minimum wage employees. In Michigan, that’s $7.40 an hour.

Tipped in fruit and beer

Housekeepers say some guests leave strange tips.

“As far as myself, I do pretty well,” says Dorethia Wilson, a housekeeper at the Shorecrest Motor Inn in Detroit.

“Sometimes they leave $5. Sometimes they leave $1. The most I ever got was $30. About 75% of people tip.”

But guests leave things other than money.

“The strangest thing I ever got was … a watermelon,” she says. “The most valuable thing I received was a Bible. Sometimes people leave candy. Or spare change. Sometimes they leave a case of beer — but I don’t drink.

“And I have what I call my little thank-you box. I keep the notes I get. Sometimes they’re written on paper towels. But I appreciate little notes like that, even more than the money.”

Tipping on the pillow

While guests expect hotel maids to be as discreet as the Secret Service and as honest as Mother Teresa, many travelers don’t bother to tip for a housekeeper’s excellent service because they don’t know how.

“When they do tip, they often bring it down in an envelope to the front desk at the end of their stay,” says Nancy Moore, front desk night auditor at the Best Western Georgian Inn in Roseville. “Often it’s because the housekeeper has done something extra for them.”

That method is fine. But because the maid who cleans your room might be different each day, a better practice is to leave a tip daily, Senning says. Leave it on the pillow or on a table with a note.

“Be really clear. Don’t leave loose change on the bedside table,” he says. “And if you make a real mess, leave a little more.”

Many hotel maids in metro Detroit supplement their income — with the approval of hotel managers — by collecting and cashing in empty bottles left behind in the rooms.

“It’s a hard way to make a tip,” says Heidi Hughes, staff director of Local 24 of UNITE-HERE, which represents 8,000 hotel housekeepers in metro Detroit. And while tips have slipped, “the workload has increased,” she says. “Mattresses are bigger, duvets are heavier, and there are more pillows, more amenities and bigger rooms.”

Tipping beyond the maid

Tipping can be confusing, because travelers should never tip certain people, like bed and breakfast hosts, airline pilots, flight attendants, gate agents, ticket agents and cruise ship captains.

But most service providers appreciate a tip for excellent service. That category includes maids, shuttle and taxi drivers, doormen, bellhops, cruise ship staffs and hotel concierges.

While traveling internationally, tip traditions vary, but in this day and age there is no excuse for not knowing what they are, Senning says. And tipping the hotel maid always is a kindness, no matter where you are in the world.

Why? Tipping is not obligatory, but it is part of etiquette. And etiquette, as Emily Post always said, is a combination of manners and principles.

“Manners change with times, but the principles behind them — honesty and respect — do not,” Senning says.

How much you should tip

–Hotel maid: $2-$5 per day, left daily.

–Bellhop: $2 first bag, $1 per additional bag.

–Skycap: $2 first bag; $1 per additional bag.

–Doorman: $1-$2 for carrying luggage or hailing a cab.

–Concierge: $5-$10 if they get you tickets or reservations.

–Taxi driver: 15% plus $1-$2 if they help with your bags.

–Room service waiter: 15%.

–Private excursion or tour guides: 10-15%.

–Group tour guide or driver: $2 daily

–Airport or hotel shuttle drivers: $1-$2.

When Greg McHale checks into his hotel room after a day of business travel, he expects what he calls the “wonderful and bizarre,” namely complimentary Snickers bars, Diet Pepsi and, sometimes, a compact disc of his favorite electronic dance music.

For Kimpton Hotels, it is a small price to pay for the loyalty of someone like Mr. McHale, a Web entrepreneur who spends 50 or 60 nights a year on the road. And for Mr. McHale, the personal touches — part of the hotel chain’s loyalty program — make it worth his while to seek out Kempton’s hotels.

“The level of personal attention really blows me away,” said Mr. McHale, founder and chief executive of Good2gether, which connects nonprofit organizations with donors and volunteers. “So if there’s a Kimpton in town, that’s where I’ll stay.”

Not all hotels go to such lengths to please their guests, but this year most are stretching their creativity to attract and, perhaps more important, retain guests. Hotels have been particularly hard hit by the drop in business travel, and brand loyalty has often given way to practical cost concerns as companies have cut expenses.

Only 36 percent of business travelers said they were brand loyal this year, compared with 42 percent two years ago, according to Henry H. Harteveldt, a travel analyst for Forrester Research. “And 2010 is likely to be more difficult for hotels because companies are telling their employees that every penny saved means fewer people laid off or fewer cuts in pay.”

Hotels are responding by offering free nights, upgrades and loyalty points. Many hotels, especially the high-end chains, are introducing twists to cultivate customers. Amenities including free breakfasts, no-fee Internet connections, late checkouts and paid parking are being bundled in business traveler packages. Marriott Hotels, for instance, calls its package “Business Boost,” while Hyatt Hotels has “Business Plan” and Sheraton Hotels “Road Warrior.”

As part of its package, Hilton’s Conrad Chicago Hotel is giving guests their choice among best-selling books, and a personal shopper is available to help select gifts for those left at home.

Beyond packages, some hotels are trying to make stays more enticing by reducing fees for the minibar, subsidizing some meals, offering free in-room spa services or free dry cleaning. The hotel industry is trying to keep room rates stable, which is not easy. The average occupancy rate in October was down 6.2 percentage points to 58.1 percent, and per-room revenue dropped 13.8 percent to $57.57 from the year before — the worst numbers in more than two decades, according to Smith Travel Research, in Hendersonville, Tenn.

To try to hold the line on rates, hotels are offering guests more for their money.

“It’s about offering added value rather than lowering rates,” said Sam Shank, chief executive of DealBase.com, an online search engine for hotels. “When travel fell after 9/11, hotels dropped their rates and it took a while for them to bring those prices up again. They don’t want to go through that again.”

Many corporations have room rate arrangements with hotel chains, but their employees typically claim the loyalty points for personal use, especially for long weekends or upgrading to concierge floors, where they can have a nicer breakfast, access to snacks and, in the evening, a glass of wine with hors d’oeuvres.

Loyalty points are a major selling feature for many travelers, said Don Berg, vice president for loyalty for Intercontinental Hotels Group, the world’s largest hotel operator whose brands include Crowne Plaza and Holiday Inn. The group has 47 million club members.

About 90 percent of the points are redeemed for personal use, he said. The hotel group, taking a page from the American Express and Visa rewards programs, also offers members special access to concerts and sporting events. Starwood Hotels has a similar program.

“People have guilt over being away from home and family, and this is guilt-free currency to make up for that,” Mr. Berg said. “No expiration on our loyalty points is, by far, our most popular feature.”

William R. Snider, a Houston software consultant, was able to use his loyalty points from Holiday Inns to indulge his love of baseball. He used his points to bid on, and win, World Series and All-Star game packages that provided accommodation, meals and transportation and also allowed him to mingle with players.

“I had a blast,” he said.These awards make me want to stay at Holiday Inns, if at all possible.”

Among the most inventive in catering to customers are the high-end properties. Four Seasons Los Angeles at Beverly Hills, for example, will store a guest’s suitcase between visits, the hotel’s general manager, Mehdi Eftekari, said. “So if you are traveling between Los Angeles and New York or London, you always come back to freshly washed and ironed clothes packed away in your suitcase.”

An array of exercise gear, including socks and shoes, is available to guests so they do not have to worry about smelly clothing, he said.

Kimpton offers specially prepared dinners for its most frequent guests, including one recently in Manhattan for top-tier female travelers. The chain has also introduced weekend trips like the one in October for its most frequent travelers and their spouses, in Oregon’s wine country. The wine-tasting getaway came with meals made by Kimpton chefs, and a balloon ride over the vineyards.

Paul Seus, a management consultant from Chicago who attended the Oregon weekend with his wife, Amy, said Kimpton’s special treatment cemented his loyalty.

“Kimpton called me and asked me if I would like to do something special,” Mr. Seus said.

“I’ve traveled my whole career, and I used to stay, well, wherever,” he said. “Now I’ll only stay somewhere else if I can’t find one of their hotels.”

It’s no secret that the hospitality industry has faced unprecedented challenges in recent months.  A just-released year-to-year comparative report by Smith Travel Research (STR) cited the following statistics:  Hotel occupancy was down six percent to end the week at 52.6 percent. Average daily rate (ADR) dropped 9.9 percent to finish the week at $95.86. Revenue per available room (RevPAR) decreased 15.7 percent to finish at $50.47.  Furthermore, a recent Maritz telephone survey of 1,000 Americans indicated holiday travel is projected to experience its first significant decline in a decade, accounting for a reduction of $4.05 billion of travel revenue.  The decline was attributed to a combination of financial concerns and fears surrounding the H1N1 virus.

While some see an upturn in travel in 2010, there are still nagging issues that remain.  For example, unemployment continues to rise.  The Maritz study indicated that 14% had someone in their immediate household lose a job within the past year.  Furthermore, there is some lingering impact of the so-called ‘AIG Effect’ where businesses were castigated for sending their employees on ‘unnecessary’ trips.  While the travel industry has done a nice job of defending the value of business travel, some companies have learned to adjust and live without travel at their previous levels.

Given the economic climate, it makes sense that hotels would slash rates in a desperate attempt to keep their properties full.  After all, an empty room is of no value, right?  The problem, of course, is the aforementioned statistics indicate occupancy continues to decline despite these price cutting efforts.  Furthermore, a 2006 study conducted by the Cornell Hotel School titled, ‘Why Discounting Doesn’t Work: The Dynamics of Rising Occupancy and Falling Revenue among Competitors’ previously made a strong case against discounting as a successful hotel business strategy.

Marketing Is Not The Primary Thing…It’s The Only Thing

We suspect that 2010 will show some signs of recovery mixed with continued hardship for many hotels. We all know what happens when revenue levels are constricted; fewer dollars in, fewer dollars to spend. At this point, careful consideration should be made for every dollar spent to develop business.

For many years, hotel companies have grappled with the decision of how many marketing dollars to commit to build business. At no time in history has this been a bigger challenge for hotels. Many hoteliers have historically considered marketing dollars as redundant if these dollars are needed to cover revenue shortfalls and/or operational over-spending.

This practice of redirecting dollars, which were ear-marked for marketing, to cover revenue shortfalls, could be a critical mistake in 2010. In actuality, it is too easy to cut marketing dollars to temporarily improve a P&L statement. After-all, every dollar spent on marketing comes off the bottom-line. This makes the marketing budget extremely vulnerable.

We must avoid the dreaded downward spiral; reducing rates to temporarily increase occupancy reduces revenue and profit. Using lower rates as a marketing strategy is just plain self-defeating. You may successfully sell a few more rooms, but you will enjoy it less. Don’t join the “woe is me” crowd. Create more value, then market that value.

The fact is that hotels which devote the time, money, and human resources to market and promote their hotel in 2010 , will be the ultimate winners when the economy returns to normal. This is an opportunity to harvest increased market share, which will provide a huge payback for hotels aggressive enough to go after it. But, it will take planning and commitment to accomplish this.

When times are tough, operational spending must be carefully reviewed. Service levels and amenities, which were developed during the boom years, must be re-considered. The revenue will not be there until we stop considering sales and marketing funds as discretionary and not essential to building business. It’s time to make commitments.

Strategies & Planning

In this writer’s opinion, 2010 will not be a time for experimentation and new market development. Creating new business markets is costly and time-consuming. It can sometimes be rewarding, but we have neither the money nor the time to do it properly. It’s time to review your historically productive market segments, prioritize them, and create a plan to grow them. Target marketing dollars to historically lucrative markets and always weigh the results.

If marketing funds are limited, prioritize markets in which to concentrate. Hoteliers need to search-out the 20% of markets that produce 80% of the business for your hotel; the old 80/20 rule. At the same time during the prioritization process, hoteliers need to assess the response speed of each market. How long and how many dollars will it take to see positive results; speed is good. Everyone is hurting, so create those travel partnerships, which you never found the time to do before.

Any plan, designed to build business in 2010, must include a comprehensive Internet and electronic marketing presence. There are few market segments, if any at all, which can produce results as quickly or with the zest of business as is possible with the Internet. Nothing you can do to produce business can equal the cost-effectiveness and return-on-investment of a well conceived Internet marketing program.

There are still too many hoteliers who have been unable or unwilling to devote marketing dollars to get their fair share of the increasingly lucrative Internet market. These hoteliers must understand that simply having a website is not nearly enough.

Anyone, who is serious about developing a strong Internet presence, should come to terms about how their website is performing. Performance is measured by the number of visitors your site attracts and, more importantly, the number of reservations it generates; organic search and sales. We still see many hoteliers who have no idea to what extent their website is contributing, if at all.

As we head into 2010, it’s time to get a true and honest assessment of your website to determine its soundness and functionality. Unfortunately, there are still too many hotel sites, which were designed by people who know little about search and/or hotel sales. This has resulted in having many hoteliers who have dysfunctional websites and, sadly, don’t know it.

The challenge is that they don’t know that the basic structure of their site is more than likely the cause for failure. Designing an attractive site is only a small part of a functional site..You simply cannot determine the functionality of a website by the way it looks.

There are many knowledgeable site developers who can provide you with a objective analysis of the search and sales soundness of your site. Often, minor changes can make a huge improvement in its functionality. This is often a small investment to improve Internet sales.

Human Resource Trends

Human resources will still play an essential role in hotel marketing for 2010. I believe that there are marketing people who may be perfectly suited for an abundant economy, but are totally unsuited for a tough one. Tough times call for tough players. Sometimes it’s necessary to go to the bullpen to bring in a heavy-weight when increasing market share is the goal.

If this is financially out-of-reach, get some training for your sales and marketing staff. If training is out-of-reach, many hotels have delegated marketing duties among other staff members. During a robust economy, this would not be a wise decision, but it is becoming more common today. The lack of leadership can be solved if the general manager or someone on staff has the marketing experience to implement the program.

Many hotels have solved the marketing leadership problem by outsourcing this role to outside marketing experts to guide their internal process. This is becoming a popular and very cost-effective way to implement a productive marketing plan without adding to permanent payroll cost.

It’s time to end the practice of shoot-from-the-hip marketing spending and lack of commitment to building business through marketing. For 2010, marketing will not be the primary thing, it will be the only thing for success.

The developer of the stalled Fontainebleau resort in Las Vegas plans to appeal two key legal rulings in its lawsuit against banks over their decision to stop funding for the project.

In a ruling that appeared to signal the end of Fontainebleau Las Vegas LLC’s development of the resort, U.S. District Judge Alan Gold in Miami on Aug. 26 sided with Bank of America and other Fontainebleau revolving-loan lenders in the banks’ interpretation of the credit contract at issue.

Gold at that time rejected Fontainebleau’s motion for partial summary judgment and an order that the banks immediately turn over $656 million in planned funding needed to restart construction of the project.

A separate group of term lenders, part of a $1 billion term-loan group that had been supportive of Fontainebleau, later cited that ruling when it moved for Fontainebleau’s Chapter 11 bankruptcy case be converted to a Chapter 7 liquidation. The bankruptcy judge instead appointed an examiner to supervise the sale of the project.

But in court papers filed Friday, Fontainebleau said it wants to appeal Gold’s ruling to the 11th U.S. Circuit Court of Appeals. It also wants to appeal his ruling moving the lawsuit from the bankruptcy court to U.S. District Court.

Mediation in the lawsuit, in the meantime, has been unsuccessful and the parties reached an impasse, court records show.

“The court’s orders raise issues of law concerning which there are substantial grounds for difference of opinion,” attorneys for Fontainebleau said in Friday’s filing.

They said the issues it wants to appeal should be decided as soon as possible, not at the conclusion of the lawsuit, because of time constraints facing the bankrupt company.

Fontainebleau said the lawsuit remains “an important part of its efforts to reorganize.”

“Deferring an appeal until the conclusion of these proceedings would undermine those efforts, and — even if successful — would almost certainly come too late to be of any real assistance,” the company said in its filing.

The casino resort developer also said resolution of the issues it wants to appeal would help resolve four other lawsuits related to the banks halting funding this spring after, they said, Fontainebleau defaulted on the loan agreement because of cost overruns and other problems.

Two of those lawsuits pit certain term lenders against the revolver lenders; a third suit was filed by certain term lenders against Fontainebleau; and a fourth was filed by revolving lender Deutsche Bank against Fontainebleau chief Jeffrey Soffer over loan guarantees.

Fontainebleau has borrowed $1.675 billion against the unfinished project — once valued at $2.9 billion — and estimates to complete it have ranged from $1.5 billion to $2 billion.

Besides dealing with lenders’ claims against the 63-story, 3,815-room resort, Fontainebleau last reported that as of Aug. 17, $615 million of contractor liens had been filed in the case.