Carlson Says Hotel Rates to Recover
Hotel room rates may jump back to pre-crisis levels sometime during 2012 to 2013 as companies start to ramp up their travel budgets, the head of private travel and hospitality company Carlson said on Tuesday.
"Fundamentally, in order to grow businesses you need to travel, you need face-to-face contact," Carlson Chief Executive Hubert Joly said at the Reuters Travel and Leisure Summit.
Companies pared back their travel spending last year as global economic activity slowed and unemployment grew. Hotel room rates tumbled nearly 9 percent in 2009, the worst year for the hotel industry since the Great Depression.
The downturn has forced some firms to make permanent changes in the way they book travel, Joly said. But other companies are likely to revert to previous levels of spending.
"Try investment bankers and tell them on a permanent basis that they're going to be in the back of the plane -- they're not going to do deals," Joly told reporters.
Joly's comments echo sentiments from another hotel operator this week.
Starwood Hotels & Resorts Chief Financial Officer (HOT.N) Vasant Prabhu noted that as the economic outlook improves, it is likely that companies will loosen some of their more onerous restrictions on travel spending.
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Source - Reuters
