Posted 3/18/2010 - 11:45:19 AM
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What are these?
ATLANTA—Some positive signs that the lodging industry is poised for a long-term recovery have emerged here at the Hunter Hotel Investment Conference, most notably that the first quarter of 2010 is expected to show demand growth following eight consecutive quarters of declines.
That message was delivered by Jan Freitag, vp, Smith Travel Research, who noted demand “has been positive since December 1.”
Mark Woodworth, president, PKF Hospitality Research, reinforced those findings. “This is the quarter that demand growth will turn positive,” he said.
Freitag also noted there has been some movement in group business as occupancy has increased 1.5% thus far in 2010. Although the increase is not nearly as great as the 11.5% occupancy increase experienced on the transient side, he said, “we’re not bleeding rooms on the group side anymore.”
Freitag also implored hoteliers to “trust the data” and suggested the current price cuts seen throughout the industry “are too steep.” Woodworth noted last year at this time his firm was forecasting RevPAR declines of 3.2% for 2010 and the expectation now is for a 1.1% decline in RevPAR for the year.
A day earlier, however, Dr. Rajeev Dhawan, director and associate professor, economic forecasting center, J. Mack Robinson College of Business, Georgia State University, and Sam Chandan, president and chief economist, Real Estate Econometrics, cited some of the key issues still plaguing the industry while at the same time acknowledging that conditions are improving.
“There’s an overhang of toxic debt in the banking system,” said Dhawan. He added there also has been a “big plunge in the job market,” but pointed out "we’re in the midst of a very slow recovery.”
“This downturn for hotels is not as much about overbuilding as how we financed the properties,” said Chandan, He did, however, begin his remarks on a positive note. “It’s no longer will we have a recovery but rather what kind of recovery will we have,” said Chandan.--<em>Dennis Nessler</em>
