A recent survey conducted by Ernst & Young LLP shows that hotel owners and management companies are increasing efforts to strengthen cash positions in order to survive the economic downturn.  The purpose of these efforts is to efficiently position their businesses for mid and long-term growth.

Key findings in the survey, conducted in global hotel enterprises that range in size from under $150 million to over $600 million in revenues, resulted in the following:

Cost Management - The hospitality sector is likely to be affected with hiring freezes, reductions in working hours and layoffs being implemented.

Capital Strategies - Of the respondents in the survey, 33% state that they plan to raise new capital in 2009, with 38% stating they will seek capital in 2010-2012.

More than two thirds of respondents plan to enter into joint ventures with other capital enterprises to make their business stronger.

Business Challenges - The second biggest challenge to the hotel business is decreasing average room rate, according to 56% of respondents.  This is right behind the biggest challenge, which is considered decreasing demand by 82%.  Other challenges that respondents considered are lack of financing, steadily climbing labor costs and competition increases.

Green Initiatives - Up to 88% of respondents currently use recycling programs and energy saving measures in their hotels.  Those that do not intend to implement these measures next year.

This entry was posted on Tuesday, April 21st, 2009 at 9:25 pm and is filed under Economy, Resort Operator News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.