Today the last true defender of optimistic hotel forecasts threw in the towel and declared that year end 2009 hotel income will be 74% worse than forecasted in April. Mark Lomanno, whom I greatly admire, is President of STR and has been the most sanguine of hotel forecasters. In April, he predicted that revenue per available room would be down 9.8% for 2009. Now he is predicting revenue will be down…17.1%. For the full confession see http://www.hotelnewsnow.com/Articles.aspx?ArticleId=1487.
And for those of you hoping for some sort of recovery in 2010, Mr. “Optimist” Lomanno is predicting revenue down an additional 3.7%.
Like it or not, we won’t see any improvement in our business until at least 2011. The wise will keep looking for ways to cut more expenses (the bone?), steal more business from competitors and think twice before trying to predict current hotel values.
Well not really. For decades (I built the first AT&T teleconference center in Dallas in 1980 – its now a flower shop) amateurs have been predicting the end of corporate travel and death of hotels because teleconferencing will replace face to face meetings. (Don’t they realize people like to touch and smell one another like other primates to build the trust necessary to do business? …or mate but more on that segment of the hotel business later…much later.)
Starwood Hotels announced it will use Tata’s TelePresence worldwide and Marriott announced a deal with AT&T (there goes the flower shop) to have teleconference centers in their key hotels… if you can’t beat ‘em join ‘em. For the anthropological reasons mentioned above, I don’t fear any effect on hotel defaults from this development…but once they get smell-a-vision and touch-a-conference watch out. And that will happen in our lifetime.
Since his passing, I have successfully avoided watching more than five seconds of news (the time it takes to switch channels, encounter another pop eulogy and then turn off the damn thing) about a genius musician and typically neurotic child star….but fate has placed Michael Jackson in the hotel business news. Several hotels near Neverland (please never again) booked up to 100% occupancy within 20 minutes of the announcement that his body may be displayed there. America get a life!!! Whether this boon keeps the hotels out of default will be a topic later. I know you cannot wait.