FelCor Q4 profit hit by low hotel room rates 

(Reuters) - FelCor Lodging Trust Inc.( FCH.N ), the No. 2 U.S. hotel owner, announced on Tuesday a shortfall in fourth-quarter earnings due to weak hotel room rates at the end of the year.

The company owns a diverse portfolio of 169 hotels including Holiday Inns in major markets, and is the largest owner of Embassy Suites properties.

"Occupancy has increased, while our room rates remain below prior year levels putting further pressure on our margins," Thomas Corcoran, president and chief executive, said in a statement that reflected malaise widely felt in the travel and lodging industry.

FelCor said that room revenue, a mix of room rates and occupancy, had risen about 3 percent in the fourth quarter from a year earlier, which was half the high end of the 4 percent to 6 percent range the Irving, Texas-based company had originally targeted.

Occupancy at the company's hotels, which are managed by other companies, was about 58 percent in the quarter, up from 55 percent in the year-ago period, which was the aftermath of the Sept. 11 attacks, but operating profit margins fell about 2 percentage points to 28 percent.

FelCor estimated fourth-quarter earnings before interest, tax, depreciation and amortization, or EBITDA, would be $56 million to $58 million, compared with the Wall Street consensus forecast, compiled by Multex, of $59.19 million.

Funds from operations, a key measure of operating earnings for real estate investment trusts, would be 9 cents to 12 cents per share, which compares with estimates by Wall Street analysts of 21 cents per share, according to Thomson First Call.

Before payment of a fourth quarter dividend on Series A preferred stock, funds from operations were 13 cents to 16 cents per share, FelCor said.

Most industry hopes for a 2003 hotel industry recovery have been shelved in the face of the weak economy and threat of war between the United States and Iraq.

Hotel room rates have remained weak because business travelers have stayed close to their home bases. Patronage by business people, who are less price sensitive when the do travel, is key to raising rates, analysts say.

Corcoran said in a recent interview that group and leisure travelers were still relatively steady.

Shares of FelCor, which also owns Doubletree, Sheraton, Westin and Crowne Plaza hotels, rose 2.6 percent, or 30 cents, to $11.85 before the company released earnings.

Corcoran said in an interview that individual hotels were hustling to sell rooms. "It continues to be just a street corner business," he said.

Perspectives on the Global Hospitality Industry From The Cornell School of Hotel Administration’s Professional Development Program 

Professors at the Cornell School of Hotel Administration are framing the future of the global hospitality industry in classroom exercises. The Cornell Professional Development Program (PDP) gathers hospitality professionals from around the world to confront new realities and develop new strategies for success in a changing world.

A typical class in the Cornell Hotel School’s Professional Development Program is a highly intense meeting of the minds of hospitality managers from all over the world. Attendees are encouraged to bring specific operating problems from their own work environment to the classroom for discussion.

In his PDP class, “Strategic Hospitality Management,” Associate Dean Thomas P. Cullen offers the thought that “strategic planning is dead,” and that corporate agility has replaced corporate stability as a survival skill. “Most businesses don’t have time for strategic planning in the current environment,” Cullen says. “The pace of change is too great. Strategic planning is really a set of guesses about  the future. In today’s world, no one can guess well about what will happen next.”

Cullen, who was in New York City on Sept. 11, 2001 and witnessed the destruction that day, says, “We have to plan for the unexpected and be able to respond to events. The hospitality industry has an inventory that perishes every day when rooms sit empty. An organization and its leadership need to address opportunities and confront problems in real-time. We practice this sort of thinking in our class exercises.”

Professor Cullen will be teaching his course in “Strategic Hospitality Management” this Spring and Summer at PDP sessions on the Cornell campus in Ithaca, New York; Los Angeles; New York City; and Brussels.

Professor Chekitan S. Dev, a global leader on hospitality marketing strategies, teaches several PDP courses. Professor Dev says that the successful manager today must be a “market driver” in creating and capturing value to  succeed in the globally competitive hospitality industry. "The fundamentals of the hospitality business are still important," Professor Dev says, "but we have to
keep up with our customers who have a rapidly changing perception of values they seek for their hospitality dollars." Dev points to the "redefinition" of hotel and restaurant offerings as one industry response to the need for value-based products.

Professor Dev has recently completed a detailed "Value Drivers" study that defines what customers look for when choosing a hotel. In this study, he and his co-authors note that over 30% of the choice-making process today is led by new value drivers such as technology, loyalty programs and customization options.

Professor Dev will be teaching his courses in “Strategic Marketing for the Hotel Industry” and “Strategic Marketing for the Restaurant Industry” at the Cornell campus in Ithaca, New York; Los Angeles; and Brussels. In addition, in the Cornell campus PDP curriculum, Professor Dev will teach a course in diversified “Marketing Management.”

Professor Cathy A. Enz, executive director of the Cornell Center for Hospitality Research, is another member of the PDP faculty, teaching three new courses this year. Professor Enz has recently completed a detailed “Future Leaders” study that defines the new competencies for success in the hospitality industry.

Although the results of the study have not been released, Professor Enz notes that skills in self-management, critical thinking, and strategic implementation are surfacing as important competencies for hospitality leaders and necessary for dealing with future changes in the hospitality operating environment.

Professor Enz will be teaching her courses in “Strategic Leadership,” “Strategic Decision Analysis,” and “Self-Management and Personal Understanding” at the Cornell campus in Ithaca, New York, in the Spring and Summer 2003 PDP curriculum.

The Spring and Summer 2003 courses of the Cornell Hotel School Professional Development Program are scheduled at the Cornell campus in Ithaca, New York (June 30 – July 25) as well as in Los Angeles (May 5 – May 10); New York City (May 28 – 30; July 20 – 25; and July 28 – 30); and Brussels (June 2 – June 14). The courses, taught in three-day sessions, are divided in tiers to serve the needs of entry level, middle management, and senior management professionals in the hospitality industries.

The Cornell Hotel School Professional Development Program is supported in part by the Anheuser-Busch Foundation.

Egyptian Tourism Industry Shows More Signs of Rebound 

The latest tourism figures released by Egypt's Central Bank show that the country's tourism industry continues to rebound sharply. According to the Central Bank, 498,000 people visited Egypt in September 2002, compared to 372,000 in September 2001.

The figure was also up from the September 2000 level of 455,000 people. Tourism figures peaked in August 2002, when levels reached 574,000, the highest number of tourists since 1993. Egypt relies heavily on tourism as a key source of foreign currency. The sector suffered considerably after the 11 September 2001 terrorist attacks in the US, but now appears to be on the rebound. The positive effects of increased tourism in Egypt were evidenced last month when the Central Bank announced a rise in the foreign exchange reserves (see Egypt: 27 December 2002: Forex Reserves Rise on Gradual Recovery of Tourism in Egypt). However, the tourism sector recovery will remain cautious in the short and medium term, whilst the situation in the occupied territories and Israel remains troubled, and the possibility of US-led military action against Iraq still looms.

Source: World Markets Research Limited

Small Luxury Hotels Of The World Sees Largest Membership Increase 

Small Luxury Hotels of the World, a consortium of the world's top, independently owned hotels, has increased its membership by 37 new properties to 293 - the largest annual increase in over a decade and the highest-ever membership total.

Moreover, SLH has expanded its international presence by adding its first properties in Hungary, Morocco and Myanmar (formerly Burma).

Lee Ann Gamble, regional manager of the Americas for SLH commented, "We have been able to differentiate ourselves in this uncertain travel climate and our new members clearly recognize the value the SLH brand brings to a property. Our record-breaking year proves that SLH remains committed to providing the highest level of quality and service to its members."

Out of the new members, the North American region has five new properties including:

* Hotel Parisi in La Jolla, CA (http://www.slh.com/usa/la_jolla/hotel_laupar.html)

* Hotel Healdsburg in Healdsburg, CA 
( http://www.slh.com/usa/healdsburg/hotel_heahea.html  )

* Hotel Telluride in Telluride, CO ( http://www.thehoteltelluride.com )

* Hotel Valencia in San Antonio, TX 
(  http://www.slh.com/usa/san_antonio/hotel_sanval.html )

* Soniat House in New Orleans, La 
( http://www.slh.com/usa/new_orleans/hotel_newson.html )

For the first time, Budapest, Edinburgh, Prague and Vienna feature their only SLH properties, allowing visitors to these cities to embrace the SLH experience of luxury, exclusivity and intimacy. Other global destinations with additional SLH properties are Belgium, Indonesia, New Zealand, Portugal, Switzerland and Thailand. New SLH destinations within the British Isles are the Thames Valley, St. Andrews as well as Dunlavin in Ireland.

All of the 37 new properties are visually represented in the 2003 hotel directory. Last year's edition of the SLH directory was awarded the 2002 Hermes Award for 'Best Hotel Guide.' Delivering beautifully illustrated, full-page descriptions, the 2003 directory provides detailed information on all SLH properties, each of which falls into one or more of a number of categories: spa & sporting resorts, heritage houses, romantic hideaways, waterfront hotels, adventure playgrounds and city sanctuaries.  

About Small Luxury Hotels of the World

SLH brings together 293 of the world's finest-quality hotels, embracing not only the romantic heritage of rural retreats and historic houses, but the sophisticated indulgence of city sanctuaries, spa centers, sports resorts and superior game lodges in over 50 countries.

Hopes for a Rally in Tunisian Tourism

OBG -  Tunisia was host to some unusual visitors last week, as adrenaline-addicted rally drivers sped down the country on their way to Libya and Egypt. However, much as this year’s Paris-Dakar (or more precisely Marseille-Sharm el Sheikh) drivers were welcomed, many inside the tourist industry feel that it will take more than exhaust fumes and Stéphane Peterhansel to bring back the tourists to this North African nation.

Last year was a particularly bad one for the tourism sector. While initially, there was cautious optimism that the September 11th, 2001 attacks had failed to dampen the European market’s enthusiasm for Tunisia, in April this optimism was badly shaken when a suicide attack on a synagogue on the resort island of Djerba killed 21, including 14 German tourists. Coming at the beginning of the tourist high season, the effects were disastrous. There were drastic falls in arrivals, low occupancy rates and even the wholesale withdrawal of certain tourist operators, such as the British company, Prestige Holidays.

According to the Ministry of Tourism’s latest figures, total non-resident entries declined by 8.3% year-on-year in the period January to November 2002. This translated into a 14% decline in tourist revenues, which fell from $1.6bn in 2001 to $1.4bn in 2002. The economy has felt the impact particularly acutely, as tourism is the country’s major foreign currency earner at roughly 17% of total earnings.

The anomaly between entries and revenue is largely due to changes in the composition of the visitors. European tourists, who accounted for 67% of the market in 2001, were far scarcer in 2002, with a 20.4% reduction, led by the Germans (down 35.1%) and Austrians (down 33.1%).

On the other hand, there was a considerable boost in tourists from the Maghreb countries - up 18.7%. The Libyan market in particular performed well, expanding by 24.2%. These results now make Libyans and the Algerians the first and third most important sources of tourism, with the French the most important amongst the Europeans.

Three basic inferences have been drawn from this. Firstly, that the Maghreb market has been important in mitigating the decline in the European market. Secondly, that despite this fact, tourism revenue has still been hit as Maghreb visitors spend less than their European counterparts - or at least, their spending is not so easily accounted for as they do not go to the conventional tourist resorts. Thirdly, it is those most familiar with Tunisia who continue to show faith in the country.

The last illustrates the point that for a sector like tourism, image is all-important. The massive decline in the German market is no doubt due to potential package tourists unfamiliar with the region being scared away by images of bombs and terrorism. On the other hand, tourists from neighbouring and historically close countries, such as Libya, Algeria, France and Italy, have proved more resilient.

Another factor worthy of mention is the rapidly expanding Eastern European market. Led by Russian arrivals, up 74.7% in the 2001-2002 period, the East Europeans saw their share of total European arrivals increase from 5.5% in the period January-November 2001 to 6.9% in the same period of 2002.

Although the high season was pretty catastrophic for Tunisia, there is strong evidence of a slow recovery since late August-early September. In November, total non-resident arrivals increased by 5% year-on-year, including an increase of 2.2% amongst Europeans and a 7.8% increase amongst Maghrebis.

The very latest figures, which show the number of nights spent in hotels, (irrespective of origin) are also positive. For the first week of 2003, approximately 336 000 nights were spent – compared to approximately 271 000 in the same week of 2002. This represents a progression of 24.2%. Significantly, the occupancy rate for that week, 29.6%, is above that recorded in 2001 (28.4%) – the figure might seem low, but it is respectable for the low season.

It is such figures which have put the government in a bullish mood for 2003. According to Reuters, government sources are estimating an increase of 15% in 2003: 5.5m tourists (100 000 more than in 2001) bringing in $1.72bn.

This may be over-optimistic. Leading figures within the sector are more hesitant, citing the looming potential war in Iraq as the number one question mark. Even though Tunisia is relatively far removed from events, the duration and effects of the war are important factors in creating uncertainty.

Tunisia’s tourist sector is also structurally placed in a niche – tourist operator-driven package holidays – which is most sensitive to bad publicity, even when this negative image derives from other countries in the region.

Economically, this type of tourism is also plagued by a low level of profitability. This is not due so much to a low level of linkages - industry, particularly agro-industry, has developed strongly through providing inputs to the tourism sector – but rather, it is due to the contracting relationship between hoteliers and tour operators. In this arena, the economic fight is being waged most acutely.

During the 1990s, the Tunisian tourist market experienced a long boom, particularly in the hotel construction sector. Attracted by government incentives, a large number of investors built hotels in the country. Many were inexperienced in tourist services, and found ready partners in European tour operators, who would often hire the premises for a contracted period.

While the relationship was beneficial for a while, in the latest cyclical downturn it has turned sour. There has been a remarkable consolidation amongst European tour operators, with new giants like TUI now able to set far more onerous terms on the local hotels and operators. The market Tunisia has traditionally attracted from Europe - the cheap, ‘sun and sea’ tourism - is also highly competitive, with a largely homogenous product to be found in Spain, Greece, Egypt, Turkey, Italy, Croatia, and so on. The market might be large, but it also faces competition from newer phenomena such as low cost airlines, which are currently gaining a larger market share in the EU.

All this has resulted in the 2002 downturn pushing some local hotels to the wall. However, it has also resulted in officials and leading figures in the industry sitting up and taking notice.

The 2002 World Bank report on strategy for tourist development in Tunisia points out that the Tunisian market is largely undiversified when compared to its competitors, both in terms of product and in terms of tourist provenance.

Diversification is the key. Health, for example, already a principal magnet for Libyan tourists, is seen as one vector of potential growth. This fits in with Tunisia’s place as the second spa destination in the world, after France. The World Bank singles this out as one of the most potentially dynamic sources of tourist development. Business tourism is another potential money-spinner. Even Tunisia’s cultural patrimony is being re-examined and rediscovered, with EU funding for a number of projects, such as the regeneration of the Dogga Roman bath ruins. Carthage, Kairouan, and the Roman amphitheatre at El Djem – the country has its fair share of ancient sites largely overlooked since mass tourism took off in the 1970s.

However, the country still retains a poorly developed image and a low level of services. But there are signs of things being done. The Tunisian government is expanding its privatisation programme to include many tourism companies. Meanwhile, new air links are being developed with the Gulf region, as Levantine and Gulf Arab tourists are currently less common than those coming from Ireland.

Sport is also important. Perhaps Tunisia cannot lay claim to the Paris-Dakar route just yet, but elsewhere, sport is being cited as of serious tourism potential. Golf is the most serious contender, with courses springing up rapidly in recent years at sites such as Tozeur, Tunisia’s desert oasis (much to some locals’ chagrin). The attraction is obvious, with Tunisians intent on marketing themselves as a meteorological paradise for rain-sodden golfers in the north and Far East.

On the horizon too shimmers the hope of Tunisia hosting the football World Cup. With the competition as good as promised to Africa in 2010, the government decided at the end of December 2002 to enter the competition to hold the tournament alongside other serious contenders such as South Africa, Egypt, Morocco and Nigeria  

Set Goals the S.M.A.R.T. Way

By Christina Morfeld

A key determinant of an individual's success or failure in meeting a goal can be summed up with one small word (or, more accurately, acronym): S.M.A.R.T.

No, I'm not referring to the person's IQ, GPA, or ability to complete the New York Times crossword puzzle. I'm referring, rather, to the presence or absence of five important goal attributes. Goals most likely to be achieved are:

• Specific
  
  Becoming an effective salesperson, while definitely a worthy pursuit, is too vague to be an effective goal. How can we determine what steps to take unless we are more exact about what we are looking to accomplish? Instead, we must identify and base our goals upon distinct characteristics of good salespeople, such as high sales volume, repeat customers, and referrals.
  
• Measurable
  
  Once we identify which aspects of sales we would like to enhance, we must determine what criteria will be used to measure our performance. To simply say that we want to increase sales is not enough – unless, of course, we'd be satisfied with a sales growth of $.01! Instead, we need to explicitly state that we are striving to exceed last year's sales figures by X number of dollars or Y percent.
  
• Attainable
  
  Effective goals are slightly out of our immediate grasp but not so far that there is no hope of achieving them. If they are set too high, or we lack the necessary resources or support, we tend to become frustrated and abandon them. If they are set too low, we forfeit the opportunity to develop ourselves.

It is important that we not only consider our own skills and abilities when developing goals but outside factors as well. For example, while a sales goal of $1 million may seem reasonable given our past performance, changes in our customers' finances or the emergence of new competitors in the marketplace may influence our ability to succeed and should, therefore, be taken into account.

• Rewarding
  
  Unless we feel that our goals are worth the effort we must put in to reach them, it is difficult to get and stay motivated. What one person finds rewarding and inspiring, however, may hold no value for someone else.

For example, while we all work extremely hard to meet our sales goals, we may each do so for different reasons: One of us may be motivated by a pay raise or promotion. Another may place higher importance on being recognized at an awards dinner. Another may be striving toward the company-paid Caribbean vacation that is granted to the top salesperson. And for yet another, the mere satisfaction of meeting the goal may be reward enough.

• Time-Based
  
  We must assign realistic deadlines to each of our goals. Deadlines should be far enough away that we can accomplish the goal comfortably – even with unexpected delays – but close enough that we are compelled to take action.

Without deadlines, or with overly generous ones, achievement of the goal lacks a sense of importance and we may lose interest in it. If our deadline is too aggressive, however, we may discontinue our efforts out of frustration.

Most deadlines need not be written in stone. If, during a progress review, we discover that the assigned deadline is inappropriate, we can – if circumstances allow – consider adjusting it accordingly. It is important, though, that we do this only when a deadline is truly impractical – not when we fail to meet a reasonable one!

About the Author"

Christina Morfeld is president of Affinity Business Communications, a provider of high-quality instructional design, technical writing, and content development solutions. Whether writing to instruct, inform, or persuade, our work is reader-focused, benefits-oriented, and results-driven.

Contact us at 1- 203-445-9964 or info@affinitybizcomm.com, or visit the website at http://www.affinitybizcomm.com to learn how we can increase your firm's sales and effectiveness!

Beijing to abolish hotel tax to upgrade lower-grade hotels

TravelWeeklyEast.com  -  The Beijing Tourism Administration (BTA) disclosed today that the city of Beijing will soon rid of the city construction tax required from star-rated hotels.

This move will give lower-star hotels a chance to upgrade themselves in time for the Olympics in 2008.

Xiong Yumei, deputy director of BTA says Beijing’s one-star hotels are suffering, because the RMB6 (US$0.72) charge per guest each night, on average, accounts for 12 percent of the room rate. Other, lower ranking hotels opt not to seek government star ratings to avoid such construction tax.

Xiong says the move should help encourage lower-grade hotels to upgrade their facilities and services to help meet the demand for hotels in 2008.

To avoid an oversupply of hotels after the Olympics, Beijing is actively encouraging renovations and upgrades at existing hotels rather than building new hotels from scratch.

Beijing is expected to add another 300 star-rated hotels to the existing 500 properties in time for the Games.

New UK tourism chief appointed

Caterer.com  -  Culture secretary Tessa Jowell has appointed Sir Michael Lickiss as head of the new-look British Tourist Authority (BTA).

Lickiss will take up his new post as chairman of the merged BTA and English Tourism Council (ETC) from 1 April. He takes over from current BTA chairman David Quarmby.

The government announced plans to merge the BTA and ETC in October 2002 with the aim of encouraging more people both in Britain and overseas to take their holidays here.

As chairman of the new body Lickiss will oversee work to strengthen the marketing of Britain as a tourism destination and build a new marketing force for England.

The two-year position will earn him £44,270 a year for two days' work a week.

Lickiss, an accountant, was formerly chairman of the South West England Regional Development Agency, a post he held for four years.

Seoul’s luxury hotels target young customers

Domestic luxury hotels are conducting aggressive marketing campaigns targeting young people in their twenties and thirties via a shift in interior design of restaurants, bars, coffee shops and bakeries and a variety of events, hotel sources said Monday.

Lotte Hotel plans to alter overall interiors of two restaurants, a coffee shop and a bakery this year toward a more modern style and away from the current classical one.

"Wine bar "Vine" attracted young customers last year thanks to its renovation," said a source at Lotte Hotel.

The downtown Seoul hotel recruited a young woman aged 30 to head up its event business in 2002 in an attempt to develop programs to suit younger consumers.

Inter-Continental hotel in southern Seoul opened a new restaurant called "Table 34" late last year to lure young business customers. The restaurant has built a warehouse to stockpile some 4,000 bottles of wine for expected wine mania.

Westin Chosun Hotel intends to seek a shift in the interiors of four underground restaurants and bars in 2003 toward various colors far from classical interiors based on brown, which the hotel thinks will attract young customers.

O'Kim's, a restaurant at Westin Chosun has held events targeting young people in their twenties and thirties each month. This month, it has arranged an event featuring games and a space-like interior dubbed "Space Odyssey."

The Grand Hilton hotel is hosting a "romantic proposal event" at all its restaurants till the end of March. During the event period, the hotel will offer free wine, bouquets and good seats but only to customers who called it previously.

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