Hotel Industry on Pace for Steep Declines in 2009

The hotel industry will end the year with near double-digit percentage declines in the major metrics used to measure performance, according to projections from Smith Travel Research, Hendersonville, Tenn. But while the slide is expected to continue in 2010, the projected declines won’t be as steep.

The 2009 year-end projections state that occupancy will be down 8 percent to 55 percent nationwide; average daily rate will end the year down 10 percent at $96.43; and revenue per available room will be down 17 percent to $53.43. Further, supply will increase 3 percent and demand will be down 5 percent.

“The most recent economic and industry results are consistent with our forecast assumptions, and therefore, our 2009 and 2010 industry forecast numbers remain unchanged,” said Mark Lomanno, president of STR, in a statement. “We will, however, be looking very closely at September results to see if there is anything unexpected, particularly in the group and business transient demand numbers.”

In 2010, occupancy rates are projected to remain flat, while ADR is forecast to decline 3 percent to $93.16 for the year. RevPAR also is expected to decline in 2010, dropping 4 percent to $51.29. Supply is forecast to be up 2 percent and demand up 1 percent.

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