Phil AndreopoulosVice President Global Sales EuropeMarriott International

AIPC conferenceAmsterdam, Tuesday July 3, 2012

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• Part One: Impact of the financial crisis on the global lodging industry

• Part Two: Overview of the global lodging industry today

• Part Three: Hotel pricing philosophies

Agenda

R.I.P

The Good

Times?

Part One: How did the global lodging industry fare during the financial crisis?

RevPAR is the hotel industry’s global standard measurement tool.

Revenue per Available Room (RevPAR) is the total revenue generated through

bedroom sales, over a given time period, divided by the total number of bedrooms

available over the same period.

Part One: How did the global lodging industry fare during the financial crisis?

Who are the main players in today’s global market?

Part Two: Overview of the global hotel industry

Source: Otus 2009

1.9m

3.8m

Part Two: Overview of the global hotel industry

While Europe is the largest lodging market in the world, it is highly fragmented

Source: Smith Travel Research

Part Two: Overview of the global hotel industry

Current State

Source: Smith Travel Research

Part Two: Overview of the global hotel industry

Pipeline

Source: Smith Travel Research

Part Two: Overview of the global hotel industry

Pipeline

With so much new supply and growing demand,

how do hotels maximise RevPAR?

Part Three: Pricing philosophies

Group Individual

Part Three: Pricing philosophies

Getting the right balance between Group and Individual travellers

Group Individual

• Often contracts far in advance

• Guaranteed revenue (depending on contract

terms) or can ‘wash out’ (if terms not robust

enough)

• Helps forecasting / rate setting

• Often has Food and Beverage revenue attached

• Provides base business / confidence

• Can create pockets of low occupancy pre and post

• Ability to cancel on day of arrival with no charge

• Established and predictable patterns of demand

• Seasonal – established corporate / leisure

seasons

• Corporate preferred hotel programs

• Wholesaler deals for Leisure segments

• Ability of the hotel to manage demand

Part Three: Pricing philosophies

Getting the right balance between Group and Individual travellers.

Direct

Intermediary

Part Three: Pricing philosophies

s m t w t f s s m t w t f s s m t w t f s s m t w t f s s m t w t f s s mJanuary

FebruaryMarch

AprilMayJuneJuly

AugustSeptember

OctoberNovemberDecember

Single event Multiple event

Fira de Barcelona – 2012 Events Calendar

Source: Fira de Barcelona Website

Part Three: Pricing philosophies

Barcelona Case Study

Source: Barcelona Tourisme

Part Three: Pricing philosophies

Barcelona Case Study

Barcelona rate check during October:

Source: hilton.com

Arrival at the Barcelona Hilton:

Tuesday October 2, 1 night: 191 Euros

Tuesday October 9, 1 night: 341 Euros

Tuesday October 16, 1 night: 191 Euros

Tuesday October 23, 1 night: 216 Euros

Tuesday October 30, 1 night: 191 Euros

Part Three: Pricing philosophies

Barcelona Case Study

Maximising the supply versus demand curve in Barcelona:

- Corporate accounts, lone business travellers

- Group demand from exhibitions

- Group demand from smaller meetings

- The leisure traveller

- Changing / seasonal airlift

Part Three: Pricing philosophies

Barcelona Case Study

Thank you and questions…?