NEW YORK— An ever-so-slight upturn in business travel occupancies may beckon hotel owners and operators in the third quarter this year— but hoteliers will be hard-pressed to register any corresponding ramp up either in rates or RevPAR for the coming three-month period as well as calendar year 2004, according to observations released by the investment and equity research groups of UBS Warburg LLC. According to a recent report released by the company and based on feedback from its corporate travel manager contacts, UBS analysts believe September – December 2003 business-travel volume could be flat to up slightly relative to the same period in 2002, though it was felt RevPAR would likely remain flat. Looking a bit further ahead, UBS sources maintained most corporate travel managers are looking to negotiate flat rates in 2004, in addition to consolidating their use of group business with preferred hotels. Accordingly, it was felt this turn of events could put additional margin pressure on hotels as costs continue to increase. In terms of other travel-buying expectations, it was noted roughly 40% of the travel managers believe their use of midscale hotels will increase in 2004. In line with this outlook, it was indicated some two-thirds of corporate travel managers (polled) believe dealing with a one-stop shop for hotel stays is either somewhat or very important— a finding that would seem to auger well for such multi-product hotel companies as Marriott International and Hilton Hotels Corp.
