If you’re like most travelers these days, you probably leave home equipped with all sorts of electronic gadgets – whether a Bluetooth headset; Blackberry, iPhone or Palm; laptop; hair straightener or electric razor or maybe your kids’ DVD player or (with our family) their iPod Touches and Nintendo DS players. But Hotel Check-In readers say that hotels often overlook this fact.

Hotel Check-In reader WetFeetTheNovel recently raised the topic in  the discussion area called the Forum, and I figured it’s worth broadening the discussion…

Reader WetFeetTheNovel had just returned from a Doubletree Hotel, which they enjoyed more than they’d imagined. The hotel, in fact, exceeded their expecations from the great shower to room service. But when it came time to plug in the laptop computer, cell phone chargers or camera batteries…whoops!  Now the traveler has to move furniture or unplug table lamps.  Just an idea for hotel designers and renovators…we need power!  Power to the travelers!  Outlets positioned above end tables or desks would add the convenience and accessibility..

Reader SezWho echoed those sentiments in a Forum post, saying that power outlets is a major pet peeve. SezWho wrote that he travels with his laptop, phone, headset, iPod, camera, razor and Cellpod (battery backup) - and that excludes what his wife and family bring when they travel together.

When my wife and I enter a hotel room, the first thing I look for is the outlets while she checks out the bathroom.  It is amazing to me how many of these ‘renovated hotels seem to forget the need for power outlets.  Obviously they don’t think like the guests they claim they are trying to serve…Are you listening hotels?

Reader Hickson Chen also wrote me saying that “there’s never enough of them by the work desk.” He looks for four or give outlets to plug in his laptop, Blackberry, personal phone and Bluetooth headset and possibly a personal game system. He ends up charging his electronics in a few different places. He also raised another problem:

Sometimes, hotels have bad placements of outlets.  Jest recently, I stayed at the Aloft Hotel in Dallas.  They have electrical outlets just behind the bathroom sink faucet maybe three of four inches away.  I was scared to get electrocuted when I has washing my face and water splashed on the socket plate!

Benét Wilson, an online managing editor at Aviation Week Group, said her “dream hotel” in terms of plentiful and convenient outlets remains the Grand Hyatt at Dallas-Fort Worth. “I still have tears come to my eyes when I think about it,” she joked. But in nine out of 10 hotel stays, her hotel room doesn’t have enough outlets where she needs them, she told me.

So what can we do when we’re in a hotel room that has too few power outlets?

Wilson said that she always travels with her Belkin Mini Notebook Surge Portector with Built-In USB Charger, which she bought for about $15 at Wal-Mart. It rotates and fits in tight spaces, plus she uses it to charge her laptop and cell phone, and uses the USB plugs for her iPod and iPod Touch.

SezWho wrote that five-star hotels usually provide the most outlets. But if he’s staying in a less luxurious hotel, he travels with his own extension cord and unplugs lamps to free up outlet space. With his laptop booted, he’s usually able to charge a couple of other items through the USB ports.

The simple answer is that there are metal devices the size of breadboxes attached to the ventilation systems of nearly every Strip resort. The boxes vaporize highly aromatic and shockingly expensive oils into the ducts, where the airflow dilutes and distributes them. The first such systems in Las Vegas were installed into the Mirage in the fall of 1991 by Mark Peltier, president of a company called AromaSys. Since then, the systems have spread up and down the Strip and now Peltier has competitors.

But a better question is why would anything so profit-minded as a casino bother?

It’s because humans are wired so that smell is a weird and powerful sense. Smell and its sister sense, taste, have quick access to your emotional conditioning, your sexual urges and your memories. It’s why the smell of a familiar dish can transport you to your mothers kitchen or a perfume can return you to a lover’s arms. It’s also why many neuroscience papers include pretentious little Proust quotes.

You can see why it’s so tempting to use scents in a casino.

But smell is tricky. It’s not that everyone smells something different — scents are the same volatile chemical compounds for everyone. The problem is, smell is tied up with your memories. For instance, Peltier has a good friend who loves the smell of skunk because the first time she smelled it, she was on a pleasant trip to her grandmother’s house. Every time she smells skunk, she remembers that day and is happy.

“There’s no expression in our genes that says you will like this smell and not the other,” Peltier says.

Still, Peltier has some guidelines that work for most people most of the time. Citrus smells are refreshing. Floral smells are relaxing. Herbaceous smells are usually relaxing but can also be invigorating, especially peppermint. Cedar and other wood smells relax and sooth. By blending these various smells, Peltier and his competitors evoke moods or environments.

The environments vary throughout hotels, from lobbies to spas to casinos. In most of the world, Peltier and AromaSys try to make the hotels smell like the ideal version of their location, so that in south Florida he uses citrus scents and at a Colorado ski resort he’ll use woodsy scents. But in Las Vegas, each resort supplied by AromaSys has a signature theme. The Mirage smells Polynesian, Mandalay Bay smells Southeast Asian and the Bellagio has the scent of Northern Italy. The Wynn and Encore “are very unusual, you may never smell anything like that in the world.”

“Mr. Wynn,” Peltier says, “has extraordinary sensory ideas and knows what he wants. It’s more of a co-creative process with him.”

And the Venetian, Mr. Peltier, who is responsible for that smell?

Well, AromaSys is. It’s called “Seduction” and features a very significant amount of musk and is described as “strong, soothing and sensuous.”

“I actually think it’s turned up a little too strong, but the management insists on it being that way and actually kind of resented me offering my opinion,” Peltier says, before adding that the Venetian is a “great and loyal customer” and “They sell a lot of it as room sprays and candles, so what do I know?”

Hotel companies have long extended room-rate discounts and perks—such as free breakfast and Internet access—to big corporate and leisure groups who book dozens of rooms. But now, facing a decline in business travel, some hotels are extending similar deals and freebies to much smaller gatherings of family and friends traveling together.

When Lori McVicker travels with her 13-year-old son’s soccer team, the budget usually dictates stays at basic hotels with small, uncomfortable rooms. But during a soccer tournament in September, just $89 a night got the team rooms at the four-diamond-rated Renaissance Fort Lauderdale-Plantation Hotel in Florida, which offers flat-screen TVs, evening turn-down service and free shoe-shines and newspapers. (The hotel’s typical weekend rate during that period was $139.)

“It was a wonderful experience,” says the 44-year-old.

Indeed, as revenue from business travelers and large corporate meetings has fallen this year—a victim of the economy and corporate skittishness about executives being seen holding meetings at luxury resorts—small leisure groups have become increasingly important to hotels.

“We are actually going after” these groups for the first time, says Nabil Salloum, general manger at the Renaissance in Plantation, the Marriott International Inc. hotel where Ms. McVicker stayed. “We understand these groups are price sensitive, so first of all we are working within their budget” by giving them better rates than in the past, he says. Next, “we are adding breakfast maybe with the stay. We might be giving them free Internet.”

In October, Harrah’s Entertainment Inc., which owns resorts, casinos and restaurants, launched a program that allows any group booking at least five rooms access to a designated trip director who can organize hotel reservations along with shows and meals. And if the group books a restaurant or show, too, it gets to jump to the head of the line of folks waiting for a taxi outside the hotel.

The Alex Hotel in midtown Manhattan—which touts “limestone baths, rain showers and plush bedding”—started giving discounts to tour groups, including youth groups, in late 2008. The hotel “gave them [youth groups] a rate that we wouldn’t give them in past years,” says Mary Lou Pollack, general manager of the hotel. “We decided we wanted to replace that nonexistent corporate business.”

But some business hotels find that it can be tough to accommodate groups of vacationing families—including noisy kids—alongside their typical business clientele. Jamie Eighteen, a 33-year-old banker from Edinburgh, Scotland, who stays in hotels about 60 nights a year, found teenagers monopolizing the business center during his stay at the Crowne Plaza Philadelphia-Downtown earlier this year. On FlyerTalk.com, an online form for travelers, he summarized his findings: “Kids permanently using the business centre to access Facebook, Bebo and god knows what else whilst playing music on mobile phones! Swiftly followed by charging up and down the stairs and along the corridors.” When the noise continued into the night, he spoke to a security guard in the lobby. “He was responsive,” says Mr. Eighteen, and the teens quieted down.

While the hotel didn’t comment on Mr. Eighteen’s specific complaint, Bob Cosgrove, general manager of the Crowne Plaza said, “No matter who you are and why you are here we want to make sure everybody has a great experience.”

Indeed, lower room rates mean small, price sensitive groups like high school sports teams and church groups are ending up at higher-end properties. Business is “bad enough that they don’t care who is coming. They just want someone in their beds,” says Patrick Connor, vice president of the Student Youth Travel Association and president of Director’s Choice Tour & Travel, a Texas-based company that operates tours for school band and choral groups.

Hotels are handing out these perks because of a fundamental shift happening across the travel industry: Business travel has plummeted this year, while leisure travel, though still weak, has remained stronger. Hotels and industry researchers say the contrast is especially stark when it comes to people traveling for special occasions like anniversaries, family reunions and children’s choir competitions. People are still willing to spend money on those events because they think “it’s only our 50th anniversary one time,” says Mark Woodworth president of PkF Hospitality Research, a hospitality research and consulting business.

On HotelPlanner.com, a Web site owned by Lexyl Travel Technologies Inc. where groups can solicit bids for their trips from hotels, fewer corporate groups are posting trips on the site, while leisure groups continue to solicit bids, says Tim Hentschel, chief executive of the company. He says rates being offered to groups on his site are down 30% this year compared to last.

Traditionally a hotel starts handing out lower rates and perks for bookings of 10 rooms or more—what they define as a “group booking.” That still stands, but some hotels are being more flexible. Connie Tompkins, owner of Group Travel Specialists based in Coeur d’Alene, Idaho, says more hotels are willing to give perks to groups as small as five rooms. Earlier this year she booked five rooms for the Cherokee Cheerleaders from Denver at the Embassy Suites New York in the financial district. The standard rate at the hotel at the time was $259, she says. Because it booked five rooms, the group paid $189, an unusually low rate for a group that size, she says. The hotel’s general manager said he could not confirm the group’s rate.

In Hammond, Ind., near Chicago, the Fairfield Inn & Suites by Marriott Hotel, is giving out one free room with every booking of 20 rooms. Before, groups had to book at least 30 rooms to get the free room, says Shruti Buckley, vice president of global brand management for Fairfield, a Marriott brand. The Fairfield Inn in The Colony, Texas, near Dallas has started giving small leisure groups that reserve at least 10 rooms—and return their contract within seven days—2,000 to 5,000 Marriott Rewards points.

Making sure groups mingle smoothly with independent travelers is possible with some management tweaks, say some hotel general managers and group-travel organizers. The Renaissance in Plantation, Fla., puts groups on the same floor, saves several floors just for business travelers, and if a group checks in, there is “probably a little more security roaming the floors in the evening making sure it’s calm,” says General Manager Mr. Salloum.

And some business travelers say hotels are working harder to smooth over infuriating moments caused by unruly groups. Dan Nainan, a 28-year-old stand-up comedian and actor from New York who sleeps in hotels about 100 nights a year, says lately hotels are more willing to refund a night’s stay if he complains (nicely) about noise from a loud, unruly group staying near him, likely “because their business is down and they want to keep their customers happy,” he says.

But Mr. Nainan also recommends taking matters into your own hands at times. A few years ago he got stuck next to a rowdy rock band at a hotel in Taiwan. After repeated rude awakenings throughout the night, he got up around 6 a.m. to catch his flight, taking time to get “vengeance.”

He called the next room pretending to be a front desk employee. There is a “very pretty lady that wants to see you,” in the lobby, he explained. “But you must come down to get her.”

“On an inflation-adjusted basis,” he began, “ … it’s going to probably take eight to 10 years to get room rates back to where they were in 2007.”

This assessment was more severe than the reality faced in the aftermath of 9/11, when it took rates six years to recover on an inflation-adjusted basis, according to STR. But then again, this downturn also has seen historic extremes in industry performance declines.

Still, not everyone agreed with Lomanno’s projection. Jim Rozell, senior director of revenue optimization at Carlson Hotels Worldwide, said that 2007 was an inflated benchmark to begin with.

“In 2008, portions of 2007, rates were not where they should have been,” he said. “They were well above where they should have been,” adding rates are now where they should have been.

For the industry to think it will recover to 2007 levels is probably unrealistic, he said.

Yet others, such as Bonnie Buckhiester of Buckhiester Management, a Seattle-based yield management consulting firm, concurred with Lomanno.

And whether you agree with the claim or not, it’s important to start thinking about recovering rates at the onset of the economic upturn. Here are five questions every good revenue manager should ask himself or herself to get started:

1. Have you forgotten your price point?

There’s a difference between slashing prices and making discounts look like promotions, Rozell said. The former implies cutting rates to establish the lowest competitive price point among your peers, assuming that guests’ booking decisions are based solely on price.

Promotional discounts, however, offer cost-conscious consumers a value-oriented deal that maintains a reference to the original price point. For example, if a guest buys two nights and gets one night free, they still know how much that third night is worth.

“The key thing is to keep that higher reference price out there, so that people being driven by value still realize this is a (US)$299 product,” said Chris Anderson, assistant professor for the Cornell School of Hotel Administration.

2. Are you using the right comp set?

“Revenue mangers have to go back and revisit their comp sets and determine if they’ve got the right comp sets,” Buckhiester said. This is especially important as revenue managers learn to navigate the new normal, in which five-star hotels are charging four-star rates, four-star hotels are charging three-star rates, and so on.

Read “It’s all about who is in your comp set.”

3. How often do you update your forecasts?

Monthly forecasts are great for C-level boardroom meetings, but they don’t provide the type of up-to-date information needed to make accurate, day-to-day decisions from the revenue management perspective, according to Buckhiester.

So how often is often enough? Track accuracy by the day, Buckhiester advised. This is especially important for hotels at which revenue management is not outsourced or automatic.

4. What’s your most profitable business mix?

It’s not enough to determine your most profitable business mix in general, Buckhiester said. You must determine the most profitable business mix for today’s market conditions, and then adjust it accordingly as the economic climate changes.

To do so, look at all revenue streams, all income, all internal and external costs, and really drill down into them to determine what mix of guests will generate the highest total revenue—not just the highest initial room rate.

5. Does the product match the price?

Price points shouldn’t be arbitrary; they should accurately reflect the product and demand, Buckhiester said. While this might sound obvious, far too many hoteliers aren’t analyzing where the demand for certain guestrooms and packages actually lie.

Buckhiester advised taking a month or two to track upgrades to see what guests want and are willing to pay for. Then, build in up-sell opportunities to capture that demand.

Kimpton Hotels, for example, offers guests upgrade opportunities in their confirmation e-mails. “This is what you bought … you can get this upgrade for (US)$10 right now instead of (US)$20,” Buckhiester said. “It may or may not be available when checking in, and you can change your mind.”

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.

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.

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.

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.

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.

However, the biggest problem going forward will be pricing power. That is, hoteliers will still have a hard time pushing that ADR back to levels enjoyed just a little over a year ago. As the hotel industry rapidly lowered prices to pump up occupancy, the industry will now have to reckon with a baseline price that is much lower than it’s been in about five years.

“It is getting a little better,” said Mark V. Lomanno, president of Smith Travel Research (STR), during this past weekend’s AHLA Fall Conference held in conjunction with the International Hotel/Motel & Restaurant show here in New York. “During the last couple of months, demand has begun to trend upward and I can say with a great deal of confidence it is not going to get any worse.”

Lomanno said that, while the hotel business has been in a malaise, on average there are 2.7 million rooms sold every day in the United States.

According to figures from STR, rates during the last year declined precipitously from an average daily rate (ADR) of $107 a night to about $96. However, that seems to have hit a plateau that is reminiscent of the previous downturn experience in fall 2001 after the terrorist attacks of 9/11. But it’s the revenue per available room (RevPAR) that has suffered most during the last year.

Lomanno said RevPAR is at the lowest levels since the company began tracking that statistic 16 years ago. RevPAR has plummeted 18.1 percent this year, a full 10 percent by last year’s most dour estimates predicted by PricewaterhouseCoopers last year at this event. RevPAR slipped just 1.8 percent in 2008. As for ADR, it’s dropped about 9.1 percent so far this year after a 2.5 percent decline in 2008.

Though Warren J. Marr, director with PricewaterhouseCoopers (PwC) said the U.S. economy has stopped contracting, he expects the economy recovery to be “uneven and a bit choppy.” Part of the reason is the severity of this past decline which has been extremely significant, especially for hotel occupancy. “The magnitude on occupancy during this decline has been greater than at least the last two previous cycles,” said Marr.

He said, however, that leisure business will still be strong, although it’s because the consumer is more highly engaged in finding the best deals. According to PwC, on September 15, 2008 – the day Lehman Brothers fell apart – consumer interest in travel deals was 13 percent below average. On November 5, 2009, interest was 7 percent above average. That’s a huge swing that is helping to further depress pricing power.

“The Internet has added to the challenge and the industry needs to be targeted as to how and why to discount. What is happening now is if I find at 8:00 AM you drop your rate, by early afternoon your competitors will too. That is something you didn’t have to deal with 10-15 years ago,” said Marr.

Interestingly Marr broke down exactly where the occupancy declines have come from during the past year. And it’s group business that is essentially responsible for the mess the industry is in. Call the AIG Effect or whatever, but 81 percent of the decline is due to vanishing group business, something many hoteliers don’t see fully coming back until 2011. Seventeen percent of the decline was due to transient business; however, Marr said it was offset by increases in leisure travel. Two percent of the decline was due to contract business, such as fewer airline crews utilizing rooms.

“Our real focus is on utilizing new strategies and technology for 2010 and beyond to drive revenue,” said Jeff Wagoner, president, Wyndham Hotels and Resorts. “We are all looking at 2011 for when things turn around. Unfortunately we have all of 2010.”

One area STR’s Lomanno said could help boost pricing is through better yield management. While the science of pricing rooms is the right way, it’s still not being used effectively to bump up weekend rates as leisure travelers still set their sights on getting away. “Yield management still isn’t beinf applied properly,” he said.