by Cheryl-Anne Sturken | January 01, 2004

Despite the formidable challenges of the past few years, the hotel/travel industry has proved a gritty survivor bloodied, perhaps, but remarkably resilient.
   Consider the events of 2003. Hot on the heels of war in Iraq, which kept much of corporate America’s purse strings tightly knotted, came the SARS epidemic in Asia, a crisis that singlehandedly crippled travel to that region. Even more vexing, for much of the year the U.S. economy remained mired in a slump.
   But by October, the numbers began to tell a different story. Corporate meetings, sidelined for much of the year, crept back into boardrooms and ballrooms. Hotel occupancy levels started to inch up, and advance meeting bookings, relatively rare during the past two years, showed signs of resurgence. Some analysts were even buzzing about the possibility of rising room rates.
   While 2004 likely will not be a boom year for meetings, the signs are encouraging. For a glimpse of the key issues facing the industry in the next 12 months, M&C asked leading hoteliers, airline and lodging analysts, and association heads for their insights into the challenges, trends and critical developments that lie ahead.

On the hotel front
The hotel industry spent much of 2003 cleaning house. Noncore properties were purged from portfolios, and millions of dollars were invested to bring other holdings in line with stricter brand standards and operational requirements. The upshot: Many hotels are entering 2004 fine-tuned, well-prepared and unabashedly aggressive when it comes to courting group business.
   " Teaming up to tame attrition. The instances of attendees circumventing traditional registration to book through online third-party providers has avalanched, leaving planners increasingly frustrated and making attrition a major issue for associations.
   In 2004, a number of hotels will team up with planners to fight the problem on a united front. “Hotel companies traditionally have stayed on the sidelines and said, ‘We are protected by a contract. It’s the customer’s problem,’” says Joel Pyser, vice president of field sales for Bethesda, Md.-based Marriott International Inc. “Well, we can’t afford to do that any longer. No one enjoys presenting a customer with an attrition bill. We have to partner with them to solve it.”
   " Online control. Web surfing for the lowest rate has become a consumer sport. It also is a major thorn for planners managing room blocks. The Alexandria, Va.-based International Society of Hospitality Consultants estimates online bookings accounted for 30 to 40 percent of all reservations booked within a four-week arrival window in 2003 up 20 percent over pre-9/11 numbers. 
   Hotels are attempting to corral the chaos. “We have put a lot of effort and capital into developing electronic tools to drive customers to our own sites,” says Steve Armitage, senior vice president of sales for Beverly Hills, Calif.-based Hilton Hotels Corp. “In 2003, we increased electronic requests for proposal by 38 percent over 2002. I can honestly say to our meeting clients that no matter where their attendees look, whether for a Hilton or Hampton Inn, we have brand integrity.”
   As of Jan. 1 this year, planners meeting at Marriott or Renaissance properties in the United States can take advantage of a deal Marriott forged with Quincy, Mass.-based Passkey International Inc. last October. Attendees can register and book online, and planners can access their group’s booking records 24/7 at no extra charge.
   “We made a significant investment on behalf of our clients to give them the tools they need,” says Marriott’s Joel Pyser. “We haven’t had time to see all the success yet, but I think when customers see what we are doing on their behalf, that we are willing to take some of the risk, it will pay off.”