2010 to be Challenging Year for Hotel Industry, Says STR

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(HENDERSONVILLE, TN) -- According to Smith Travel Research, the U.S. hotel industry is projected to end 2010 with decreases in two of the three key performance measurements.

STR projects 2010 occupancy to be flat at 55.1 percent, ADR to decrease 3.2 percent to US$94.39, and revenue per available room to drop 3.2 percent to US$51.99.

Supply growth and demand growth during 2010 are both expected to increase 1.8 percent.

"We have believed for quite some time that it will take the better part of 2010 for the hotel industry to regain its footing," said Mark Lomanno, president of STR. "Our latest forecast reflects what we believe will be a somewhat challenging first half of the year. Momentum will build in the second half of 2010, which will lead to the beginning of a turnaround in 2011.

"The high-end business travelers will drive the shape of recovery almost certainly," Lomanno added. "There has been substantial recovery at the high end of the market during the last couple of months."

The outlook indicates that the industry's performance will turn positive in 2011. STR projects increases in all three key performance metrics during 2011: Occupancy is projected to increase 2.2 percent to 56.3 percent; ADR is forecasted to rise 2.0 to US$96.28; and RevPAR is expected to grow 4.2-percent to US$54.18.

Supply in 2011 is projected to be up 1.0 percent and demand is expected to increase 3.2 percent.

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