Can’t wait for those hotel bargains I predicted a few days ago? Thanks to this week’s Wall Street meltdown, you don’t have to.
They’re already here, according to one hotel executive. And they’re probably going to get better.
Larry Cohen is a senior vice president at Lake Buena Vista Resort Village & Spa, a two-year-old condo/hotel/resort a mile from Walt Disney World in Orlando. “Even though we are so close to all the major attractions in Orlando, we are feeling the effects of the stock market downturn a great deal,” he told me.
Before I continue, a disclaimer. I love a deal as much as the next guy, but no one benefits from a fire sale in the long term. So what’s happening to Cohen and his colleagues nationwide isn’t good news, strictly speaking
According to Cohen, the stock market meltdown isn’t solely responsible for the turn. It helped, though.
It’s not just this one major day that has caused the downturn, but it certainly has created more cancellations, shorter stays and a great deal less spending by the people still traveling.
Another problem has been the financial stress the fuel costs have caused with various tour brokers that normally deliver thousands of international and domestic clients to our area. One main operator recently went into bankruptcy and stranded thousands of passengers in Orlando and in the UK.
Clearly, the traveling public both domestic and international, are tired of all the bad news they read and hear daily in all media. A day like yesterday just takes them over the top, even if they are not directly affected, they feel like they better cut back on leisure type expenses and either postpone, shorten or stay considerably closer to home for their vacations.
But it isn’t just the guests who are creating deals by canceling their trips. Hotels are part of the problem, too. When faced with a downturn, they panic.
Most immediately start dropping rates, giving food, beverage and gas away, and in some cases offering two-for-one stays.
Rate integrity goes away and it becomes a tremendous buyer’s market.
This, of course, is wonderful for the travelers, but devastating for the operators. It also signals more negative news to potential travelers that the market is becoming desperate, so there must be something really wrong. And there goes the vacation.
In our case, you can add to the problem the real estate aspect, with the lenders going away, very few people are willing to buy a second home type product, even though it is a tremendous buyer’s market right now.
Bottom line: a week like we’re having is enough to take prospective hotel guests “over to the negative side” and it takes a lot to get them back.
But for those who come back, the reward is an inexpensive vacation.
