Travel and Tourism Trend in Hotel Industry: While a Gloomy Forecast for 2009 is Living Up to Expectations, Will it Get Worse? A lodging expert and professor at NYU Tisch Center for
Hospitality, Tourism and Sports Management suggests that after years of record spending levels, 2009 is forecast to be
the first year since 2003 that the US lodging industry will spend less
on capital expenditures than the prior year, to the tune of $3.75 billion. That represents a decrease of over 30 percent from 2008. He predicts that hotel guests are unlikely overall to notice the decrease in spending or make-overs and renovations as certain items will be maintained such as bedding, signage and Internet service. Other predictions for 2009 include 1 to 3 percent fewer occupied hotels rooms and lower average daily rates of 2-5 percent, resulting in a
decline in RevPAR (revenue per available room) from 2.5 – 12 percent.
As I watched my city council meeting in Huntington Beach, Calif., the city treasurer announced a decrease of 10 percent in revenue from hotels in December 2008, right in line with this predicted trend. Occupancy is predicted to be the lowest since 1971, at 56 - 59%, with 16 consecutive months of occupancy
decline in the US, more than the 12 month period following 9-11. In 1990 and 1991 occupancy dropped for 18 months in a row.
Forecasters travelhorizons and Ypartnership projected better outcomes through recent surveys they performed, which brings into question the data’s reliability. Many factors such as travelers surveyed just now being impacted with job reduction or loss, business loss and other factors may be creeping into the mix during the time when U.S. travel companies and hoteliers are typically gearing up with new hires to face the summer season.
The survey results found that 71 percent of
leisure travelers intend to take an
overnight trip of 50 miles or more than home in the next 6 months, confirmed by Peter Yesawich, CEO of Ypartnership.
Travelers may see elimination of fees
and surcharges introduced and collected over recent years such as early departure fees, reservation cancellation fees,
internet fees, local calls, business center fees, room services
delivery surcharges, etc. Transient Occupancy Taxes and surcharges collected by the municipalities could increase, though travel experts advise cities to look elsewhere for additional revenue as overtaxed guests may also look elsewhere for a cheaper vacation.
Like so many other businesses, hotels could close in certain markets if numbers are not met.