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2017 Hotel Industry and Arizona Outlook

Keeping on point with hotel industry trends and forecasts along with a razor-focused local outlook is critical for property profitability. By all accounts, much of the U.S. hotel industry has recovered from the recent recession. However, severely affected Arizona is still experiencing market increases. That's great news. In fact, forecasted market trends for 2017 include*:
  • Occupancy of approx. +3%.
  • Hotel with group space with 1.8% increase
  • Transient at about 1.3% in occupancy
  • Largest revenue opportunity is in average rate with a 5% lift over 2016
  • Food and beverage revenues targeted with positive increase.
While market trends go up and down, they also change quickly. For example, old style menus of all-purpose and upscale restaurants have to feature the latest trends especially healthy alternatives for all meal periods.

Arizona's Main 2017 Challenge

What's the key challenge for this year? Capturing profit dollars to the bottom line. In Arizona, a voter measure passed serving up the largest hourly wage increase of over 24% to $10.00 minimum wage. The HMC team anticipated the increase and had already taken a close look at ways to save labor and expenses to compensate for the margin of profit we had in 2016. Our #1 focus has always been expense of labor. In as much as our hard-working employees deserve a living wage, we also have a responsibility to our property owners to deliver the margin of returns they invested for. Unfortunately, this means the additional cost of wages is passed on to paying guests. We will, in turn, make up this new pricing structure with the same great service we've always delivered. On-site GM's work, along with HMC corporate staff and owners, very diligently to always exceed guest satisfaction.
Who will be the winners in 2017? The owners and operators, who anticipate, understand and plan based on the market and trends for 2017.
* Travelclick, January 2017
Intercontinental Hotels Group
Crown Plaza Hotels & Resorts
Holiday Inn & Suites
Hilton Hotel
Hampton Inn & Suites
Choice Hotels