Leisure Guests Replacing Corporate Clients

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Once the gold mine of hoteliers, corporate travelers could be counted on to spend generously on lodging and meals. Expense accounts were fat and all inclusive, leaving plenty of room for catering, expansive meeting rooms, AV facilities, and other lodging perks. Then came the economic downturn.

Now, hotels seem to be courting leisure guests in the race to boost profits. In response to major changes in the corporate travel attitudes, travel budgets for blue-chips and SMEs were sharply cut during the worldwide economic slowdown. Leisure industry CEOs and their marketing departments are worried that even if the economy picks up, corporate budgets will remain lean.

One luxury hotelier noted that companies have advised their executives to stay clear of five-star hotels. Other corporations are turning to video conferencing to reduce travel budgets--something that has gained momentum as technologies make virtual meetings more accessible and multi-functional.

Corporate procurement departments are tightening travel budgets and asking hotels to include Wi-fi access, free transfers, free phone calls, and discounts on food and beverages. These perks squeeze hotel profit margins, which accounts for the increased courting of leisure travelers.

In many instances, hotels have sought short-term fixes to the problem. Both business and leisure travelers have noticed fewer bathroom amenities, closed club lounges, fewer concierge staffers, reduced hours at restaurants and bars, and infrequent airport shuttles.

Many observers note that this is the worst downturn in decades. In January, U.S. hotels had a record-low 45 percent occupancy rate--the lowest January rate since industry statistician Smith Travel Research began tracking data in 1987. As a result, nearly 400,000 U.S. hotel employees were laid off during the past two years, observed Joe McInerney, president of the American Hotel & Lodging Association.

On a personal note, I have noticed more hotels offering bigger and better perks to leisure travelers. Better room rates, free WiFi access and free snacks.

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Alex A. Kecskes has written hundreds of published articles on health/fitness, "green" issues, TV/film entertainment, restaurant reviews and many other topics. As a former Andy/Belding/One Show ad agency copywriter, he also writes web content, ads, brochures, sales letters, mailers and scripts for national B2B and B2C clients.

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