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The Doom-and-Gloom Predictions for the Hotel Industry Continue

Sorry to deliver this news so early in the morning, but don't kill the messenger on this one. We just stumbled across a particularly unpleasant article circulating that, unfortch, explains that Smith Travel Research has "significantly lowered its expectations for U.S. hotel industry room rates and revenues, and the firm said moderate declines would continue through 2010." Ugh.

Per a statement:

Smith Travel Research now projects that average daily rate will drop by 9.7 percent in 2009, and revenue per available room will be down 17.1 percent year-over-year. In April, the firm had forecast a RevPAR drop of 9.8 percent and a rate drop of 3.6 percent (BTNonline, April 28). STR also said occupancy will drop 8.4 percent to 55.4 percent this year, slightly down from the rate of 56.5 percent it forecast in April.

In 2010, drops in all three metrics will continue, STR said. It forecasts that rates will drop 3.4 percent, occupancy will drop by 0.3 percent and RevPAR will be down 3.7 percent.

STR President Mark Lomanno predicts that it's not unrealistic to expect this bummer period to last longer than six years (or rather, it may take that long for rates get back up to the levels they were at in 2007).

Good morning.