Thursday, January 7, 2010

How's Trade?

For most motels, the peak season starts from Boxing Day and this is a crucial time to maximise revenues and fill the tank in order to get through the more difficult cooler months trading. 

It should be a rare time when operators have the upper hand and can cherry pick reservations in order to exploit the opportunities abound. The object of the game is to strike a balance between increasing the average number of nights stayed, minimising the number of people per room while increasing the  average room rate. The New Year period can also provide a challenge that requires identifying quality reservations while weeding-out young revelers at the reservation inquiry stage.

We are now 12 nights into the season and after talking to a few "Motellas" around the traps it would appear that demand is fairly flat and not as intense as it has been in previous years. We get the feeling that while pockets of good quality accommodation are trading well, older lower quality properties are not receiving the benefit of overflow expected at this time of the year. 

Much like last year, we have found that traditional middle class families of Mum, Dad and 2-kids have been conspicuous by their absence. New Zealand's latest beneficiaries, the middle-class "Working for Families" subsidised honky family still appear to be coy about loading up the credit card with motel accommodation in spite of talk of recessionary times abating. 

Disappointingly, we have also found a decrease in quality longer stay bookings. More holiday makers appear to be less willing to commit and are more likely to chance their arm by turning up unannounced, stay for one night and then moving on. We get the feeling that Kiwis are still hitting the road, however are leaving it more last-minute, mixing up accommodation sector options and staying away for a shorter time frame. 

Compared to a low recessionary trading base last year we are predicting that the traditionally busiest and most crucial trading month of January will either be the same or at best marginally up.

For some motel businesses this may be enough to defer the call from the bank manager or the landlord until much later in the year;-)

So, what's your thoughts on the holiday season so far?

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