Discounting – it’s human nature. You can’t fight it, yet so many people do. Just eight or nine months ago industry leaders were saying everyone’s learned from the past and there’d be no discounting this time around. Alas, that’s not to be. Discounting dominates just about every market, every niche. Just look at US accommodation.
STR Global predicts revenue per available room will drop by 17.1% in 2009. This is a situation company president Mark Lomanno described as “disappointing, surprising and a little bit sad.”
“We felt like was that the industry would hold pricing more than it’s been able to. A lot of the commentary that we heard from the brands and the revenue managers is that they learned their lessons in 2001-2002, and they would be able to react better the next time around.
“For whatever reason, maybe because this downturn is so severe and so dramatic and so different than they were expecting, what they learned they weren’t able to apply.”
Lamanno concluded: “On an inflation-adjusted basis, its probably going to be longer than six years before the rates get back to 2007 levels.”
History repeats. It’s a maxim, not a cliché.