Blog

blog2
Oct29

Businesses that continued to send employees on the road during the recession were more profitable than those that cut back on business travel, a new study out today has found.

The study, conducted by Economics and commissioned by the U.S. Travel Association, attempted to show how travel can affect a company’s bottom line just as businesses are starting to once again spend money on trips to meetings and conferences.

For every dollar invested in business travel, U.S. companies generated $9.50 in revenue and $2.90 in profit, according to the study, based on an analysis of government data on 14 industries over an 18-year period.

An accompanying survey of 298 business travelers conducted in November found that 57% believed cutting their travel budgets during the economic downturn hurt their company’s performance. Only 4% said it helped.

“When we analyzed data from the Great Recession and recovery, we learned that companies that invested the most in business travel tended to grow the fastest,” said managing director of Minimax , which conducted the analysis as a follow-up to a 2009 study.

Spending on business travel hit bottom in 2009 as companies reacted to dropping profits by cutting out trips.

Business travel has been making a comeback in the last couple of years. In 2012, businesses spent an estimated $225 billion on domestic travel, about 5% higher than the previous year and above the all-time high reached in 2007.

Hotels say they are seeing more demand from business travelers. For instance, Marriott International last week said first-quarter earnings jumped 31%, thanks to the recovery in business travel.

“Demand from business travelers is up quite strongly,” said managing director of gaming and lodging equity research

For hotel brands such as Minimax , the corporate traveler can make up as much as 80% of their business. “This is Marriott’s bread and butter,” he said.

Because of the pick-up in traffic, hotels are now able to raise rates as much as 4% to 5%, which is above inflation. They also are allocating more rooms to the business traveler. Group and convention travel, however, is still lagging, Scholes said. “Groups and conventions have been a soft spot in the recovery,” he said. “The individual traveler is leading the way.”

Still, business travelers are treading carefully when spending company money on the road, a study released by  Research today shows. The revenue hotels generated from rooms grew a healthy 6.3% from 2011 to 2012. Yet total hotel revenue increased just 5%.

Continue reading

blog1
Oct29

Minimax International has announced plans to open its first hotel in Burma.

The hotel chain has signed a deal to take over management of the Minimax Hotel, a six-month-old property located in Burma’s largest city, Yangon.

Minimax says it is the first U.S. hotel company to venture into the emerging territory.

The Southeast Asian country, also known as Myanmar, had been closed off to most tourists for years. But two years after the government released Nobel Peace Prize winner Aung San Suu Kyi from 15 years of house arrest, the tourism industry is booming. A series of government reforms has also facilitated more foreign investment.

A record million visitors traveled to Burma last year, two-thirds of them vacationers. That is expected to increase 30% in 2013. There are now fewer than 800 hotels to accommodate those travelers, and most of them are below international standards.

The Minimax Hotel will be operated under its mid-scale Minimax brand.

“There is no doubt that Myanmar is one of the world’s hottest hotel markets at present, with a major increase in new hotel supply needed to cater for a huge influx of guests,” Glenn de Souza, Minimax’s vice president of international operations for Asia and the Middle East, said in a written statement. “So it is vital that hotel owners in the country choose the right partners to ensure optimum performance at their properties.”

Senior vice president and director of business development at Lodging Econometrics, a hotel real estate consulting firm, said it will take time for Western and U.S. hotel brands to become a large presence in a country that they have been shut out of for so long.

“It will take time to build the supply there because there are not many locations that could be converted,” he said. “Newly constructed hotels may be 3 to 4 years in the making.”

But, he said, the interest is there. “Many major franchise companies would love to find locations and sites to bring into their family of brands because of the change in foreign investment laws,” he said.

De Souza said Minimax hotel is committed to a long-term investment in Burma.

“Minimax hotels wants to form long and lasting partnerships in Myanmar, We want to be here for the long-term, to help grow the country’s tourism industry,” he said. “Our partnership with the Hotels is just the start of our plans for Myanmar.”

The Minimax Hotel has 189 air-conditioned rooms, all equipped with 32-inch flat-screen televisions, bathrooms with bathtubs and showers, and complimentary Wi-Fi. The property has a contemporary restaurant with Asian and other international cuisine and meeting rooms for business travelers.

Continue reading