27 October 2008

Hoteliers will have to accept rate cuts

SINGAPORE ââ¬' Leading Asian hoteliers tried not to mention the dreaded RD words ââ¬' rate dumping ââ¬' at ITB Asia.

But most agreed there would be pressure on rates next year, especially in the meetings market.

Miguel Ko, president Starwood Asia/Pacific, said it wouldnââ¬â¢t necessarily be the ââ¬Åâœbig boysââ¬~ who emerged from the global meltdown in the best shape.

ââ¬ÅâœI expect the cards to be re-shuffled. Some companies will come out stronger, some weaker.ââ¬~

Ko expected consolidation of hotel groups, leaving ââ¬Åâœsix or sevenââ¬~ big players.

Ko said it was important to retain ââ¬Åâœrate integrityââ¬~ during a downturn and Starwood ââ¬Åâœwould not be the first drop ratesââ¬~.

Michael Issenberg, chairman of Accor Asia/Pacific said there would be rate decreases, ââ¬Åâœespecially in markets where we need to stimulate demandââ¬~.

ââ¬ÅâœAnd when we go out to quote for conferences, yes, I expect room rates to drop.

ââ¬ÅâœAlso, if you are a banker, and suddenly your owner is a government, there is a perception out there that you will need to be more prudent, less showy.ââ¬~

Ko said that in the luxury sector, 60% of guests had their bills paid by someone else. ââ¬ÅâœIf Microsoft or Morgan Stanley is paying your bill, you will be very circumspect how you spend their money.

Singapore boutique hotelier Loh Lik Peng said rather than drop rates he would look at throwing in free extras ââ¬' ââ¬Åâœsuch as a spa or meal vouchers ââ¬' that way we keep our rates by adding valueââ¬~.

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