Recession by docstoc93

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									Recession - How The Hotel Industry Was Hit
And How It Is Recovering
In our current age of time, the sun and plants on the planet are not the only things vital to our
survival. Economics, business, have all become living entities, compliments of the human mind.
They are now a direct influence to our lives. Which is why when an event which affects our
economy or business occurs, such as recession, we fall into turmoil and panic as our livelihood is
in danger.

The recent recession of 2009 was dubbed to be the worst recession in a lot of places. This
recession even broke the world's most unbreakable economy, when the world witnessed the
United States getting affected by the recession. The recession is so great that even Britain has
dubbed it the worst recession they had ever experienced, surpassing even the famous "Great
Depression" back in the 1930's.

All businesses big and small were affected by this recession badly, but the industry getting
affected the worst is probably the lodging industry. This is because the logic is that people are
cutting back on traveling and are staying at home and saving more now. Thus cutting the demand
for the lodging industry.

Due to the recession, hotels are losing a lot of their business travelers whom are reevaluating
their travel plans, and some swapping their overseas meetings with cheaper alternatives such as
video conferencing. On a brighter note, despite being in a time of recession, most leisure
travelers have not changed or dismiss their intention to travel. This factor however is proven to
be insufficient as most hotels are still facing major problems.

This spiral downfall of economics has caused most hotel managements to take instant measures
to ease the wounds inflicted on their business, and try various methods in hopes of keeping their
business afloat. The typical approach would be to go through a retrenchment process. But
businesses today have a lot of other more tactful ways to overcome business problems such as
recession. Such as:

Slashing Rates - This very debatable method is one of the more common methods to be
administered by the hotel industry. It involves slashing the rates of their accommodations to rake
more customers. However the downfall of this method is that, even though the customers are
more inclined to come, the cost of maintaining the room and providing for the customer would
mostly cost more, and eventually lead the hotel making a worst loss compared to when they had
fewer customers but maintained their rates.

Government Support - Some hotels are lucky enough to gain the support of the government and
stay alive during this time of crisis. In fact hotels such as the ones in Pretoria South, South
Africa, are actually reporting improvements to their business due to government intervention.
Sales and Marketing - This is a very common method used by all businesses, regardless of the
presence of a recession. This strategy has actually been a key player in keeping most lodging
businesses afloat as they strengthen the desire of the people whom want to travel, to get away
from all the stress. Especially in this time of crisis, most people would have set their priorities to
decreasing their stress levels first before any other luxury.

In conclusion, the recession has had devastating effects on the hotel industry. But given the time
to heal and the economy to make a comeback. The Hotel industry should be making it just fine.

								
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