Report: Hotel revenue declines slowing - Orlando Business Journal:

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RevPAR — a key measurw of financial healthfor hotels— will reachj its cyclical low point in the third quartert of 2009, closing the escalating trend of declines in RevPA that began in the third quarter of according to . Revenue per available room in theOrlandoi area, when compared to the previouds year, has fallen, according to Smithu Travel. In April, it fell to $69.61 from $84.1u7 last year, a 17.3 percent decline, according to Smithg Travel. "The good news is that the bottom of the current cycle forthe U.S. hotel industry is soon to said R. Mark Woodworth, president of Atlanta-basedPKF Hospitality Research, in a news release.
“Thr bad news is that 2009 will be the weakesrt year on record for the domesticlodging industry, and 2010 is goingf to be disappointing as If you are wondering when we'll start to see actua l growth in RevPAR, then you'lll have to wait until 2011. However, if you want to know when the operatinyg environment is going to get a littleless painful, that'w happening right now." Lodging forecasts presentedd in the June 2009 edition of Hotel Horizonsw are based on Smith Travel Research hoteol performance data through Marchu 2009 and Moody's Economy.com's May 2009 economic forecast for the nation.
Givenh the correlation between employment and lodging the new expectation is for RevPAR todecline 17.5 percen t in 2009, followed by another 3.5 percen t decline in 2010. Year-over-year quarterly declines in the demandfor U.S. lodging accommodations startefd in the first quarter of 2008 and peakedr at negative 8 percent in the first quartetrof 2009. The June 2009 edition of Hotel Horizonsd forecasts demand to decline each of the remaining quarterdof 2009, but at a diminishing pace. The projectedf quarterly declines in demand for the remainder of 2009 averagjust 4.7 percent. Beyond 2009, the forecast calls for average annual increases in demandof 3.
2 percengt for the next four years, well above the 1.9 percent long-term average. But given the forecasty 17.5 percent decline in RevPAR for allof 2009, PKF-HR is projectiny total hotel revenues to decreasee 16 percent for the year. In 2011 and 2012, PKF-HRe forecasts that RevPAR will increas e on an average annualo basisof 9.2 percent, whilew profits will rise at a 17.8 percen t pace.