STR's 2009 Hotel Projections Hold Steady

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(News Source: Smith Travel Research)

(HENDERSONVILLE, TN) -- Although July performance results were better-than-expected, the year-end 2009 projections have not been adjusted, according to STR's monthly forecast.

"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. "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."

STR's forecast projects 2009 occupancy to be down 8.4 percent to 55.4 percent, average daily rate to decline 9.7 percent to US$96.43, and revenue per available room to end 2009 with a 17.1-percent decrease to US$53.43. Supply in 2009 is projected to increase 3.0 percent, while demand is expected to decline 5.5 percent.

With transient demand continuing to grow, the latter part of 2009 will have some unique year-over-year comparisons from 2008. The political race in late 2008 drew large crowds at both political parties' conventions. The Republican convention was held in Minneapolis/St. Paul, Minnesota, and the Democratic convention was help in Denver, Colorado. Washington, D.C., also was positively affected by the political race. However, at the end of 2008 group and corporate travel started decreasing as the financial crisis began to take hold.

The outlook for 2010 looks slightly better than 2009, but the industry still is expected to end the year with decreases in all three key metrics. Occupancy is projected to drop 0.6 percent to 55.1 percent, ADR is forecasted to decline 3.4 percent to US$93.16, and RevPAR is expected fall 4.0 percent to US$51.29.

Supply and demand are both projected to end 2010 with positive growth. Supply is predicted to be up 1.8 percent and demand is expected to increase 1.3 percent.

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