The latest estimates for 2012 have just been published from STR, PwC and PKF: firstly, a drumroll – each are projecting continued growth into next year albeit at a lower level than 2011

Full article is available here

Interestingly, around 80% of this growth in RevPar is anticipated in higher rate. According to the most recent TravelClick Perspective (November '11), transient ADR is showing the strongest growth over the upcoming 3 future quarters of committed bookings. Groups rate is growing but at half that rate (in the top 25 markets). See full report here

So, more importantly, how can you benefit from this maximally?

Your properties are towards the tail end of their RFP season, for the most part – hopefully they have been firm in the rate proposals and had some good discussions with national account reps and travel managers to explain the value proposition for these increases: now the focus shifts to your local negotiated rate accounts (LNR). Here your sales team should have a good relationship with the local contacts through whom these negotiations will likely take place.

1. To increase ADR is not necessarily synonymous with raising the face rate higher: you can chip away at the bottom end of your rate scale and still achieve a higher ADR – and it's less painful for the client and your sales team.

2. Assess contribution over 2011
   1. Assess DOW stay pattern – if there is displacement, consider this when you formulate rate
   2. Review LOS – this should impact your rate determination – shoulder days are most valuable
   3. Know if the contribution was project based or ongoing traffic – and how it will fare in 2012

3. Planning for 2012
   1. If you have multiple room types, provide a rate that is tiered as well – that way you can collect a premium when your standard rooms are full: this will have a significant impact on your account ADR
   2. If the pattern is primarily M/T/W: let your account know of the impact to you and the reason for the higher increase – definitely, here you want to tier
   3. Consider a season variation in rate – although not viewed favorably, it will help offset displacement cost and it will allow you to keep increases at a lower level.
   4. Don't forget to consider the source – commissionable or net rate.
   5. If the pattern is going to be focused as a project, consider this as a group rate rather than an LNR. You can offer a more appropriate rate in this situation.
   6. Lower priced accounts – if the account is large and courted by many others, it is important to accurately determine what your value proposition is and how you can offer a value-add that will trump your competition. Often, it will start with an open-minded conversation with the decision-maker about what they value and then exploring how you can deliver this at a lower cost to you. Perhaps the account has become under-priced at your hotel over the years of concessions: shop the competition and you'll know what the market is willing to offer – this will give you comfort in how far you can raise the bottom.
   7. Shop the comp set for the rates they are offering to key demand generators – are you in line? If you are branded, check your account IDs and GDS codes for some large accounts – then shop your comp brand sites with theses codes – you'll be surprised what you learn!

Remember, market are trending upwards – don't be shy about soliciting for your fair share of the increase the company will be facing in every market they work in.

Good luck and please contact me for any specific assistance in strategizing for your 2012 planning.

Wishing you all a Happy Thanksgiving weekend ahead – hope you will all be blessed with joyous time with your friends and family.