1 / 57

The Current State of the Hotel Industry: Demand, ADR Growth, and Economic Challenges

Michael Dominguez, Senior Vice President of Sales at MGM Resorts International, discusses the hotel's business model today, highlighting that demand is robust and RevPAR has returned to 2007 levels. However, the industry is still catching up, especially regarding non-group leads. Key takeaways reveal slow supply growth, healthy demand growth despite economic headwinds, and how ADR will play a crucial role in RevPAR recovery. The challenges of rising costs in food and beverage are also examined, emphasizing the importance of understanding revenue per occupied group room.

dympna
Download Presentation

The Current State of the Hotel Industry: Demand, ADR Growth, and Economic Challenges

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The Hotel Business Model TodayMichael DominguezSenior Vice President, SalesMGM Resorts International

  2. Where Are We Today

  3. Demand is Back

  4. Revpar Back To 2007 Levels

  5. Group Still Catching Up

  6. What Demand Looks Like

  7. Record Nights

  8. Days Of The Week

  9. What Days Are Driving ADR

  10. Non Group Leads

  11. But…At A Value

  12. ADR Growth In Group Hotels

  13. Transient Premium Returns

  14. 2014 Forecast By Scale

  15. Industry Takeaways • Supply Growth – Very Slow • Demand Growth – Healthy – Despite Everything • ADR – Will Drive Revpar Recovery • Steady As She Goes

  16. Economic Headwinds

  17. Employment A Continued Drag

  18. Fuel Cost Impacts Meetings

  19. 5 Year Crude Oil Peaked at $222 – March 2012 45% Increase

  20. Airlines Still Front And Center

  21. LET’S MAKE A DEAL

  22. Washington Focus

  23. Corporations Remain Strong

  24. How Is A Hotel Built?

  25. Direct Cost • Rooms – 75% Lost Profit Figure • F&B – Highest Direct Cost Center • Other – Smallest Profitability

  26. Commodity Pricing

  27. Beef Prices 53% Increase

  28. Poultry Price 20% Increase

  29. Salmon Price 50% Increase

  30. Shrimp Price 82% Increase

  31. Coffee 5 Year - Price Peaked at $302

  32. Coffee 10 Year - Price 106% Increase

  33. Price Of Cotton

  34. Cotton Prices 43% Increase

  35. Income Before Debt

  36. Debt Expenses

  37. Elevate The Dialogue

  38. Revenue Per Occupied Group Room 200 Total Room Nights $20,000 Food & Beverage Spend

  39. Revenue Per Occupied Group Room Hotels Expected F&B Contribution Per Group Room Night $150 Your Expected F&B Contribution Per Group Room Night $100 You have less leverage with rate and concessions

  40. Revenue Per Occupied Group Room Hotels Expected F&B Contribution Per Group Room Night $150 Your Expected F&B Contribution Per Group Room Night $200 You have a ton of leverage with rate and concessions

More Related