• US hoteliers exude gloom

The Americas Lodging Investment Summit, held in San Diego this week, was the expected gloomy affair with most speakers stating that 2010 was the earliest any rebound would be seen.

Among the few optimists was Todd Buchholz, a former White House director of economic policy, who said there may be a recovery by the third quarter of this year.

A far bleaker assessment came from PKF Hospitality Research which said the drop in revpar during 2009 will be the fourth largest since 1930. There would be no growth until the third quarter of next year, added the consultancy.

The forecast of eight consecutive quarters of declining revpar, starting in the third quarter of 2008, would be the longest stretch of falling revenues endured by US hotels since PKF started tracking the numbers more than 20 years ago.

The hardest hit hotels will be those that were already behind their peers. Properties with less than 70% occupancy would see profits decline by 44.8% in 2009 while those with occupancies above 70% would see a decline of just 8.6% on average, PKF forecast.

The number of hotels failing to service their debt would rise from 15.9% of PKF's sample of 1,500 hotels in 2008 to 19.9% in 2009. This rise remains below the 25% level reached in the 1991 recession.

Smith Travel Research's president Mark Lomanno said that rather than occupancy, hoteliers should focus on demand. When demand is positive, it creates pricing stability in the market, he said.

STR forecast that demand would drop by 1.6% in 2009 but increase by 1.4% in 2010. Supply will increase by 2.4% this year and by 1.2% in 2010. Thus this year will see significant demand and supply imbalance but by 2010 this will have corrected.

Revpar will drop 5.9% in 2009 and rise 2.4% in 2010. In 2008, revpar decline was 1.9%, mostly due to the sharp drop-off in the last four months of the year which saw an average fall of 8.2%.

Law firm DLA Piper conducted a survey of US hospitality executives this month and found 93% of the 122 respondents "bearish". More than half (62%) thought that the full-year US hotel occupancy rate would drop below the previous record low of 59% that was set in 2002. But despite this, there is no widespread fear that hotel chains will go bankrupt.

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