Hotels suffer through cutbacks by travelers - Jacksonville Business Journal:

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Fewer visitors coupled with lower room rates ran revenueas dry in the first half of the year for hotelds inNortheast Florida. As the slower period during the summer and fallquickly approach, many hotelss have already laid off employees, cut back operationds and offered lowered rate packages to breamk even. “It doesn’t look like we’rd turning the corner,” said Dan general manager of the . “Eve 2010 looks very challenging.” The area’s largestr hotel with about 415 employees, the Hyatr had to go through layoffs and eliminate some mostlythrough attrition, King said.
Most of the current hours are heavily dictated byoccupanchy levels, especially those in housekeeping and The typical business level would generate a five-day work week for an but “if it’s a slow week, a lot of people are not closde to five days,” he “We had to change our business model to fit with A common measurement of a hotel’s revenue, called revenue per available room, fell 20.3 percent to $52.52 among Northeast Florida hotels in April compared with the same month last according to the latest report from , a globa industry data provider.
The average 21 percent declines each month this year is doubler the rate of declines in nearly every monthof 2008. “Revenuwe solves everything,” said Janice Dailey, directot of sales and marketing atthe . “If the revenur is coming in, then we can do all the extrz stuff.” Like many othedr hotels, the Crowne Plaza reduced employee events such aspizzaq payday, when all the employees get unlimitex pizza on payday. The hotel also eliminated some positions, is no longer allowing overtime and issued amandatoryy six-day work week for all managers to covee shifts and save on hourly expenses. Dailet said she has heard of other hotelscuttingy salaries, some by 20 percent.
“We just have to stop the she said. “We’re in a really hard but we will come outof this.” Falling room revenue is primarily due to very little businessx travel and fewer leisure travelers, lowerinv the occupancy levels. In normal times, area hotels make abouft 60 percent of their moneh from business travel and the rest from leisure But hotel operators say that business travel has nearly driedf up inthe Hotels’ occupancy rates are in double-digit declines and are headerd into the high teens for the summer, said Fred general manager of the Ramada Inn Conference Center in “There’s a problem ahead of The Ramada Inn eliminated a few positions and consolidated severao positions.
Pozin said the hotep is training its employees in new including having its existing maintenancr staff remodel all the hotelp rooms rather than contrac it out to keep them employed and be better poisex for when businesspicks up. The averager occupancy in Northeast Florida was 59 percengtin April, down 11 percent from the same monthy last year, according to the Smith Travel King said the first six monthsw of the year have historically been at or abovr 70 percent occupancy. Though many hoteliers woulc rather charge a higher rate to make up forlower occupancy, at this point, most have slashed ratesd to keep occupancy from falling further.
The averagw daily room rate in Northeast Floridafell 10.4 percent to $88.99 in April compared with the same monty last year. The decline was the second-largestg in more than three years, behind Februaruy this year, which fell 10.8 percentf to $87.77. “For hotels, it will take a lot longe r to get back to thenormal standard,” Dailey A hotel can’t just increaser the rate $30 to $40 at once to get back to wherr it was. “You have to do it in 3 and 5 percentg increments.
” Hoteliers have been very aggressivr with packages and combining them with city The Hyatt, for example, was offering a $129 room per night package durinvg the Jacksonville Jazz Festival that included a poster and breakfast. A room for one nighf with breakfast on the weekend istypically $149. “o can’t control the amount of business, but I can controlp the customer’s experience, and if they do have a good they’ll come back,” King Pozin said the two-for-one deals where a visitort buys one night and receives the second at a lowed rate have becomemore common.
Another deal that is moving this way from the West Coas t is called food andbeverage credits, when a visitor can buy a room nighrt and get a $30 food and beverage creditg to the restaurant in the The Ramada Inn is working on a similar package. “The idea is if you want to make leisure travelerws cometo Jacksonville, then you have to offer an attractive package,” Pozin said. “There’s people that will but you’ve got to give them the reasonmto come.” All of the hotelierss agreed that it would not get so bad that hotelsx would shut their doors.
Pozib said some could be sold to a new owned with the cash and capacity to operate the hotekl throughthe recession.