by Calculated Risk on 1/05/2009 12:17:00 PM

From the LA Times: Hoteliers see too much room at the inn

Fortunes of the once-highflying hotel industry fell hard at the end of 2008 and the prospects for 2009 look grim as anxious Americans cut travel spending and leave plenty of room at the inn.

Hotel operators have seen room reservations fall drastically as business travelers and vacationers cut down on trips. In 2009, U.S. hotels will suffer one of the greatest annual declines in occupancy and revenue in history, according to analysts.
...
Indeed, U.S. hotels have entered one of the deepest and longest recessions in the history of the country's lodging industry, according to a December report by PKF Hospitality Research. The report predicts a nearly 8% drop this year in revenue per available room, a key industry measurement of performance typically calculated by multiplying a hotel's average daily room rate by its occupancy rate.

That would be the fifth-largest drop in revenue per available room since 1930. The largest recent drop was in 2001, when the measurement slipped 10.3%.

The article also quotes well known hospitality attorney Jim Butler (someone I know and spoke with last May about the coming hotel bust):

"September was definitely a point of departure, when hotel revenues around the country began a free fall," said Los Angeles attorney Jim Butler, a hotel specialist and industry blogger. "Since Labor Day, business has been falling off a cliff."

More cliff diving ...

For anyone interested, Jim writes a blog on hotel legal issues: Hotel Law Blog