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Metro New York hotels ready for tough RFP season.

Article Excerpt
With requests for proposals from travel buyers starting to arrive in significant numbers this month, New York area hotels are bracing for another round of tough negotiations. As with 2003 rates, hoteliers expect pricing in 2004 clearly to favor buyers. Depending on buyers' willingness to shift marketshare and the presence of sufficient mandates in their corporations' travel policies to ensure projections are met, buyers can expect not only flexibility on rate but concessions on value-adds.

Occupancy and revenue results for the first half of 2003 confirmed the sense that the greater New York market, like other U.S. gateway cities, still was seriously underperforming. According to Smith Travel Research, occupancy levels in New York for the period fell 2.2 percent, compared with the first half of 2002. However, these results were not that far off occupancy levels for the top 25 U.S. markets. For the six months, occupancy nationwide slipped 1.9 percent.

More telling was the decline in New York hotels' revenue per available room, a much clearer indicator of industry profitability. RevPAR for the first six months of 2003 fell 8.6 percent, from $123 to $112. The decreases compounded...

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