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The cold wind of our recession/depression is blowing in Alaska, even though it has been a summer in paradise, thus far. This is our 10th year running my little lodging business, and regardless of what expansion we might have gone through in the winter, we would start the summer season with more sold out days than not. After the first few years it was not uncommon to be virtually sold out for the months of June, July and August; often as early as April. .
At the end of the first week of June 2009, I could count the # of sold out days ahead, on one hand. Not a day goes by that I don’t hear some tale of woe from a neighbor with a b&b, travel agent or charter operator. Tourism and travel are down across the board, and for many the season is looking bleak; for some, perhaps non-existent.
This winter as the economy crumbled before our eyes, it wasn’t that people weren’t calling and emailing for reservation availability this summer; they just weren’t booking. They were shopping and it didn’t matter that we’re among the nicest around; price won out, and we were loosing out to lower rates. The hospitality trade journal articles were all about not lowering rates; but after 6 weeks of practically no reservations, I lowered rates and ran some specials. Immediately business picked up; and although we still have availability on almost every single day, it’s often just one room that’s left. Meanwhile, the hotels and motels that stood their ground are reporting as much as a 60 to 80% down turn. Many of the smaller businesses that relied on the “spill over” effect will suffer the most, because there may never be a spill over this year!
This then may be the biggest indicator there is – We have an entire page on our website dedicated to other lodging suggestions. Historically we would begin sending guests to this page in February for the extremely popular dates like the 4th of July, and generally by April 80% of our requests would be met with “look for our link ‘other lodging options’.”
This year we have only recently started making referrals or sending folks to this page; and in most cases it’s only the groups of 3 or more; we almost always have a room left if they only need 1 bed.
The businesses that have been relying on referrals or “spill overs” will face the largest decline in business and it will be these businesses that may not be able to sustain themselves during these trying times. It will be businesses with solid footings, a strong customer base and enough business savvy and flexibility to ride out this storm that will survive this very cold wind that is blowing through our beautiful Alaska summer.