The hotel industry in the U.S. is experiencing the worst downturn since the aftermath of 9/11. usatoday.com reported some data provided by Smith Travel Research, a firm that specializes in the hotel industry.
- Hotel occupancy fell sharply during last year’s fourth quarter, including an 11% drop in November. Revenue declined $828 million in November, compared with November 2007
- The most recent data from the Bureau of Labor Statistics show 90,000 fewer employees at hotels and motels in November than there were a year earlier.
- The index, which measures the stock performance of hotels and other lodging businesses, fell 56% last year — a steeper drop than the Dow Jones U.S. index, which dropped 39%.
Luxury hotels are hardest hit by the economic downturn.
They are suffering a combination of weak economy and the “AIG effect” — companies that are concerned about being seen as spending too much after insurance industry giant AIG was blasted by Congress for spending $440,000 on an executive retreat at a California resort after being bailed out with taxpayer money.
National Business Travel Association found that 96 of 147 corporate travel managers surveyed in October suggested their employees switch from luxury hotels to those with lower rates.
In November, luxury hotels experienced a bigger decline in occupancy — 15% — than other types of hotels, according to figures compiled by Smith Travel Research. (source usatoday.com)
Even If analysts expect occupancy rates to continue to deteriorate this year — some warn hotel industry will not recover until summer 2010, they predict that the big-name chains will survive.
Although new construction slowed last year, many projects that had been planned before that are being completed. In the USA, more than 1,400 hotel projects are expected to be completed this year, compared with 1,330 last year. This increase in rooms available this year will add to the pressure on hotels to cut rates.