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Hotel Recession Reaches 19 months

By Anonymous

From HotelNewsNow: U.S. hotel industry enters 19th month of recession

economic research firm e-forecasting.com, in conjunction with STR, announced that following a decline of 1.1 percent in April, HIP declined 1.3 percent in May. HIP, the Hotel Industry Pulse index, is composite indicator that gauges business activity in the U.S. hotel industry in real-time. The latest decrease brought the index to a reading of 83.1. The index was set to equal 100 in 2000.
...
The U.S. hotel industry is still in its recession, having officially entered the 19th month of decline, said Evangelos Simos, chief economist of e-forecasting.com.

Click on graph for larger image in new window.

And from the Chicago Tribune: Chicago hotels racked by glut of rooms (ht dum luk)

Hotel occupancy and average daily room rates have posted double-digit percentage drops over the first four months of this year compared with the same time last year. ... Despite demand being down, the city's supply of hotel rooms is on the way up.

The opening of four new hotels, plus rooms that will join the inventory at Trump International Hotel & Tower, will add 989 rooms to the downtown Chicago market this year.
...
In April alone, the average room rate in downtown Chicago hotels was about $162 a night, 23 percent less than the roughly $210 per night guests paid during April 2008, according to data from Smith Travel Research Inc.

As a result, total revenue for the 35,000-plus rooms in downtown Chicago has plunged 25 percent year to date.

The decline in revenue per available room (RevPAR) in Chicago is only slightly worse than the national average decline of 18.9% compared to last year, see: Hotel Occupancy Rate Falls to 51.6%.

Full post as published by Calculated Risk on June 08, 2009 (boomark / email).