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Where’s The Bottom?
by Frank J. Kupiec
The country’s economic woes continue to batter the
local economy. But how long will the downturn last? Experts
agree to disagree on when the recovery will take
place, but one thing appears to be evident. Owners
and operators alike will look forward to seeing 2008
in their rear-view mirrors.
For the hotel industry, average daily rates have
continued to rise, although at a slowing pace, but
the decline in occupancy rates as well as RevPar may
lead some hotels to actually reduce room rates in
the coming months. While this may seem like a quick
fix in order to increase revenues, it would likely
cause more harm than good to the industry as a whole
as competitors scramble to keep pace, thereby
decreasing revenues across the boards and doing
little to boost occupancy. The storms kicking up
again in the Atlantic have continued to dissuade
business groups from holding events in the region,
which has put downward pressure on not only the
hotel industry but also the restaurant industry and
other ancillary businesses.
The restaurant industry has struggled mightily as
consumer confidence continues to drop. The financial
crisis and cratering of the stock market has led to
severe declines in patronage at restaurants.
Bankruptcies have become commonplace, as Bennigan’s
and others have begun to close their doors in this
turbulent market. Survival of the fittest certainly
applies, and those concepts best able to adapt to
change while keeping pricing in check will likely
come out net winners. Restaurateurs looking to
expand will find vacant units/buildings already
built-out as restaurants, and this will help them
get into spaces for a fraction of the cost of
building ground-up. And with rising retail vacancy
rates, Landlord’s will be forced to negotiate
competitive rents in order to entice solid
operators.
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Extended-stay Outpaces Industry
Demand is up for the nation's nearly 2,500
extended-stay lodgings, originally the domain of
business men and women on long assignments, now
also sought out by leisure travelers. Occupancy
averaged 69.9% from January through June, better
than the U.S. hotel-industry average of 61.4%,
Smith Travel Research says.
To read more about extended-stay lodging,
click here.
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Declining Occupancy to Trigger Rate
Reductions?
Occupancy at hotels in the U.S. has continued to
decline through the first half of August, a
market research firm said Thursday, leading
analysts to predict that the industry will begin
reducing rates to fill rooms. For the week ended
Aug. 16, Smith Travel Research said occupancy at
U.S. hotels dropped 4.5 percent year-over-year
to 68.7 percent.
To read more about hotel occupancy rates,
click here.
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Increase Turns With Technology
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Go Interactive
Analysts say automation is one of the key trends
in the restaurant industry, varying from the
kiosk-based ordering in fast-food outlets to the
classic conveyor-belt experience offered in
sushi joints. Interactive ordering at the table
is the hottest new trend.
Read more...
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Use Psychology to Increase Revenues
Restaurateurs can get diners to spend more on a
meal if they drop the dollar symbol from their
menus, new research shows.
Read more...
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New POS System
United Bank Card has recently developed the
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You can also send an email to
fkupiec@cpsproperties.net or call
239-821-2963.
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It's a Tenant's Market...Are You Taking
Advantage?
While the credit crunch is making it hard for
some restaurant companies to get loans to build
new locations and renovate old ones, other
chains are using the slowdown to secure better
terms from landlords struggling to find viable
tenants.
For the full story, click here.
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