October Hotel Forecast Holds Steady, Says STR

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(News Source: Smith Travel Research)

(HENDERSONVILLE, TN) -- As the U.S. hotel industry traverses the precarious gulf between the summer months and the conference travel season, the year-end projections have not been adjusted, according to STR's monthly forecast.

"As we close the summer travel season and move into the fourth quarter, there are pressing questions that will be answered in the coming months," said Chad Church, industry research manager at STR. "The declines in revenue per available room we've experienced throughout the past year started in August 2008, but those losses begin to pick up steam in the fourth quarter (particularly November). As we come to conference season again, our outlook for 2010 and 2011 will depend heavily on the performance data we see during the next two months.

"Thus, Smith Travel Research is holding our forecast steady and waiting for preliminary data for October before revisiting our 2010 outlook," Church continues. "Depending on the initial indications of performance during the conference season, we'll revise our 2010 outlook if necessary. As of now, we stand at revenue per available room projection of a 4.2-percent decrease in 2010. While we do have a bias to improve our RevPAR target for 2010, our wait-and-see approach will provide us with more discernable data, especially in the average-daily-rate portion of the equation."

STR's forecast projects 2009 occupancy to be down 8.4 percent to 55.4 percent, ADR to decline 9.7 percent to US$96.43, and RevPAR to end 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.

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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