As resort demand rebounds, planners find that flexibility pays.
Hit the hardest of any hotel segment by perception issues and economic woes, resort hotels are finally seeing an upsurge in demand. According to an assortment of recent hotel forecasts from consultancies such as Smith Travel Research and Pricewaterhouse Cooper (PwC), hotels, particularly those at the top end of the scale, are poised to make a strong comeback this year and beyond.
PwC’s U.S lodging forecast predicts “robust growth” this year, with ADR (average daily rate) rising 4.1 percent over 2010 levels. At luxury properties, ADR is predicted to increase by 6.3 percent.
While no one is calling it a seller’s market yet – and rates still remain below their peak levels of several years ago-planners such as Adam Lawhorne, CEO of Chicago-based Meeting Incentive Experts, are finding more flexibility is required when negotiating for space at high-end resorts these days.
“When it comes to five-star resorts, I’m not seeing higher rates, but less availability, especially during peak periods,” he says. “Resorts are definitely recovering from the AIG Effect and more people are going for five-star properties. If you want to meet in Hawaii or the Caribbean during January through May, space is harder to get – although there are dates if you’re flexible.”
Mexico, which has been hurt by negative press over drug crime incidents, is among destinations where resort values remain strong, planners say. Cornwell and Lawhorne are among those who encourage clients to consider Mexico, believing that safety concerns are overblown.
“Beach resort destinations such as Los Cabos, Cancun and Puerto Vallarta are safe destinations, with CVB’s and the Mexican Tourism Board making sure they are safe,” Lawhorne says. “We recently did a program in Los Cabos for a major overnight shipping company, with the company’s security director coming along to monitor the situation. We got a letter from them afterwards, attesting to the safety of the destination.”
According to Lawhorne, groups meeting in Mexico or the Caribbean are increasingly likely to choose from the growing number of all-inclusive resorts geared for the meetings and incentive market. He believes these properties offer both quality and value.
“About 70 percent of our programs in Mexico are now at all-inclusives,” he says. “People have thought of them as spring-break hotels, but the reality is that they have five-star dining, ocean views, great activities. Having one price for the program is great.”Join Mailing List