These same issues can impact hotel revenues as other industries. Studies suggest that the recovery process from existing conditions could take up to twenty-three months or more. Similar thoughts have been expressed by investors about the future outlook for hotel business which is evident from the results of various lodging real estate investment trusts (REITs). In this way, the revenues of hotels may be affected by the same or subtle shifts regarding the direction of the economy overall. The changes in the sales of hotels could be a factor in the bottom line of your business. This can eventually impact your financial results.
Storms like Katrina and Hurricane Katrina have directly contributed to the sharp decline in hotel revenue for the city, due to the increase in tourists coming from other countries. The decline in hotel revenue is expected to lead to an increase in the cost of guests. The assumption that this is the case is widely accepted among businessmen. Due to increased demand the assumption seems reasonable. A drop in the rate of hotel rooms may have an indirect, however real effect on New Orleans’ economy. The indirect effect occurs when the drop in room rates lowers the number of visitors who visit the city on a an everyday basis.
In the previous paragraph that the devastation of the hurricane Katrina on New Orleans was felt throughout the state. Slidell, New Orleans’ biggest city, was the city that was the most affected. Most people within Slidell is aware of the extent and severity of the response to the catastrophe. Everyone knows that New Orleans was the hardest-hit city when it came to damages or destruction caused by the storm. Also, what about the city’s hoteliers. The owners of hotel operations are taking action to minimize any negative impact on New Orleans.
Hotel operators are taking steps, particularly those who have several New Orleans hotels, to safeguard the New Orleans market. One of the ways they do this is to lay off specific segments of their staff. https://romaop.com/suwon/ Another option is to cut down on certain hotel services-for example, they may be decreasing the amount of employees who work full time in hotels and instead turn that function over to part-time employees. Another option to prevent unauthorized access is by using digital locks and other security measures targeted to keep people from hotel rooms. These are just a few steps that will have a major impact on New Orleans’ economy even before Hurricane Katrina.
In addition to securing hotels from the negative impacts of Hurricane Katrina on occupancy and revenues, New Orleans area business entities have also taken steps to combat the slowdown in economic growth following the storm. Numerous local retailers and manufacturers have announced closures of stores as well as retraining and the closing of warehouses. While the economic growth is slow, certain areas in New Orleans have seen the positive effects of increased traffic to stores and less travel restrictions. Local businesses were able to profit from reduced prices and increased customer confidence following Hurricane Katrina to increase sales.
The slow recovery of New Orleans will mean that the impact of this on hotel sales won’t be noticed until later in the year, as New Orleans hopes for a record Christmas season. Hotel owners are suffering unprecedented economic impacts from the economic downturn. The impact of the recession on larger chains has not been significant, if at all.
The business cycle plays an important part in the effect of pre-pandemic demand in the rate of occupancy. This is good news for New Orleans commercial real estate and New Orleans as a whole. The natural impacts of Hurricane Irma will be reversed as the occupancy rate rises and tax income starts to increase. If nothing else the fact that a time of high occupancy could be the foundation of a healthy tourism economy that will help boost the business of the city long after the waters recede.