Airline Cutbacks Expected to Hurt Hotels

It only makes sense. Fewer arrivals at your airport means fewer travelers looking for hotel rooms.

But PKF Hospitality has released a report that identifies a direct correlation between a reduction in airline seats to hotel stays. And, if the reduction in routes hits the anticipated 10%, PKF estimates that occupancy will drop 3.9%.

MeetingsNet's Sue Pelletier surmises that this decrease will be felt mostly in leisure travel...and not in the meetings market.

I'm not so sure...as the reduction in flights will increase fares. Add the increasingly inane add-on fees and hassle...and I'm thinking a lot of potential attendees will say, "screw it" and stay home.

In any case, hotels in air markets are in for a rocky ride. As are the DMOs upon which they depend.

Comments

[Meilee]

Any comments on Pricewater's Study that focused on the drive markets? Any ideas on their correlation between hotel occupancy and gas prices? If I remember correctly it was for every 10% price jump at the gas pumps hotel occupancy dropped .5%. #'s from 2005, 06, and 07 were crunched in the analysis.

[Bill Geist]

And that's the difference, isn't it? Not all markets will see an occupancy decrease because of a reduction in air service. Fuel prices will negatively impact some while benefiting others.

The real key will be what happens to business travel because of cost/hassle. Because business travel drives room tax revenue...and room tax revenue drives promotion. Decrease in business travel = Decrease in promotion = Decrease in Leisure & Convention Travel.

[SEO hotel]

As the fall travel season begins, U.S. airlines are sharply reducing domestic flights and routes nationwide to cut their losses from high jet fuel prices.