Thursday, August 30, 2012

State of the UNION address: Summer occupancy rates -- a mixed bag with a happy forecast

Dear Followers,

As the summer season slowly draws to a close it's time for an update on the state of things at Country Inn the City and for the NYC bed and breakfast industry in general. First off I should mention that the summer, contrary to popular belief, is a slow period for tourism. Many are deterred by the high heat and humidity and would rather spend time at the beach or visit cooler tourist spots. Similarly business travel, a huge contributor to occupancy rates, is low as many choose the summer to take time off, typically for family vacations.

Occupancy rates are a key indicator of an Inn/Hotel's success - when occupancy rates are low so is the price and vice versa. Occupancy rates for Country Inn the City for our two most difficult second half months in July and August were at approximately 65%, about the average, not too bad given the continued economic woes; spurred on most likely by our relative longevity and increasing notoriety. The good news is that we were able to sell most of our suites at rack rates when typically we find that we have to discount our lowest rate to compensate for the lack of demand. What we found this summer is that there were some weeks that we just didn't get any demand, never more so than the last two weeks of August, that is in stark contrast to the first two weeks.

Naturally we tried every tactic to attract last minute business for these two miserable weeks -- from Trip Advisor specials, to Google Places announcements, to mass last minute special notification mailings via our website, but in the end we may as well have been fishing in empty waters. Every year I do my best to encourage those on a budget who have to visit NYC (and there are many) to come sign up for our last minute specials. In the end it's a no-brainer for the budget traveler -- travel during high season and pay double for a horrible room or travel in the off season and pay half for a gorgeous apartment. This is the conundrum that both parties face -- folks want to come here when the weather is conducive to travel and they would rather go elsewhere when not.

So what of that other aspect of summer -- the advance booking pick me up in fall bookings? It's no secret in the industry that the fall is New York's busiest season, a time when we depend on profits to make up for the losses of summer whereupon an increase in demand allows us to increase our rates -- to a level, however, that is still considerably below our full service hotel equivalents. In summary, I am happy to report that this aspect of summer is where things have been dramatically different than previous years following the downturn with demand reaching levels that have been hard to keep up with at times, a harbinger we hope that consumer confidence is finally on the upswing albeit that we are still running in to some price resistance. So folks keep those calls and emails coming and lets ride this wave together.


Fergus O'Brien

P.S. Here is the link to sign up for last minute specials notification:

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