According to a recent report from PKF Hospitality Research, the downturn of the hotel industry will last longer than previously expected.  The firm says RevPAR will drop by 13.7 percent this year, with a quarter-over-quarter gain not expected until the first quarter of 2011.

The RevPAR plunge will be caused by a 6.4 percent decrease in ADR combined with a 7.8 percent decline in occupancy.  It is believed this will lead to a 30.1 percent decline in industry profits in 2009.  Fortunately, the report forecasts that the current quarter will see the most severe drops, and by mid year this should begin to moderate.

According to Mark Woodworth, President of PKF Hospitality Research, two major markets will begin to experience RevPAR recovery in the fourth quarter of this year - Minneapolis and Orange County, CA.  Also, he expects that lodging demand will increase in San Antonio and Baltimore.  However, boosts in occupancy will be over-ridden by significant increases in supply.

Most cities will experience RevPAR declines in 2010, but by 2011 through 2013, all 50 markets are expected to see gains in occupancy, ADR and RevPAR.   While this forecast does not give as bright a forecast as Smith Travel Research, it should also be considered that PKF covers only the top 50 lodging markets.

This entry was posted on Friday, June 26th, 2009 at 2:25 pm and is filed under Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.