Recession Great For Hotel Deals, Not So Much For Hotels

September 22, 2009 at 3:27 PM | by Omri | Comments (0)

Our sister site Jaunted recently reported that no one's really traveling on airplanes these days. Now it turns out that all those people who aren't flying also aren't staying in hotels, and won't be for at least the next year:

An �overhang� of hotel rooms being built will depress prices through 2010 following the biggest first-half drop in room rates since in at least five years... �Through the go-go years, more and more hotels were built,� David Roche, president of Hotels.com, said in a telephone interview. He said prices probably won�t recover until late 2010... Lodgers worldwide paid 17 percent less on average for their bookings through Hotels.com in the six months compared with the same period in 2008.

As the article points out, the combination of high supply and low demand means we're in the midst of a travelers' market. Prices are down between 16% and 18% across the planet. Even the UK, which is ramping up for the Olympics, is seeing an excess of hotel rooms and a shortage of people willing to pay money to stay in them.

But it's really New York, which finally overtook Las Vegas as the fastest growing hotel market in the in the US, that's seeing rates plummet. Eight thousand new hotel rooms and a marked decrease in occupancy doth not a healthy revenue stream make. Of course now we're entering the famously popular "time when it gets really cold and everyone wants to leave" New York season. So things should be picking right up.

[Photo: Roland Geider / Wiki Commons]

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