Lower RevPAR Forecast Reflects Impact of RecessionATLANTA, GA/PRNewswire/ -- PKF Hospitality Research (PKF-HR) today announced that it has lowered its 2008 forecast for a key hotel industry metric, revenue per available room or RevPAR, from up 4.5 percent to up a below-average 3.0 percent.
The new RevPAR forecast appears in the firm's recently released first quarter 2008 Hotel Horizons(SM) report. The change was based on revised projections by Moody's Economy.com, PKF-HR's primary economic forecasting agency, which now is calling for a U.S. recession this year due to deteriorating economic fundamentals.
Declining economic fundamentals, fueled by the turmoil in the capital markets and the escalating price of oil, portend a much weaker domestic economy for the months ahead, according to Economy.com.
Its 2008 estimate of Real Personal Income Growth, a key measure of lodging industry performance, now is only 1.6 percent, down from an estimate of 2.6 percent as recently as the fourth quarter of last year. While this is certainly not good news for lodging industry participants, PKF-HR still believes that the typical U.S. hotel will enjoy increases in both revenues and profits, but at a more modest pace.
"Our econometric forecasting model focuses on Real Personal Income and Total Employment as the primary indicators for lodging demand," said Mark Woodworth, (photo top right) president of PKF Hospitality Research. "These economic measures are forecast to exhibit minimal growth during the first part of 2008, but start to climb back to their equilibrium levels during the latter months of the year.
"Accordingly, we are forecasting the demand for lodging accommodations to inch up 0.9 percent in 2008. This pace of demand growth is approximately half of the long-term annual average, but still represents a net gain in accommodated room nights for the year. When looking at 2008, we believe that U.S. hotel owners and operators will struggle to grow their revenues and profits, but market conditions will not be as damaging as we saw back in 1991 or 2001."
Woodworth noted that the 2008 first quarter is expected to be moderately positive for hotels, but added that lodging performance will deteriorate as the year progresses. He suggested that the downswing should be relatively short-lived, however, with a turnaround expected in the
2009 first quarter.
Hotel Horizons reports are prepared for 50 major U.S. markets, as well as six national chain scales. Each report contains a six-year forecast of supply, demand, occupancy, ADR, and
RevPAR, as well as other valuable economic and hospitality information.
To purchase Hotel Horizon reports, visit the PKF-HR website at www.pkfc.com/store, or call (866) 842-8754. PKF Hospitality Research (PKF-HR), headquartered in Atlanta, is the research affiliate of PKF Consulting, a consulting and real estate firm specializing in the hospitality industry.
PKF Consulting has offices in Boston, New York, Philadelphia, Washington DC, Atlanta, Indianapolis, Houston, Dallas, Bozeman, Sacramento, Seattle, Los Angeles, and San Francisco.
Contacts:
Mark Woodworth
President
PKF Hospitality Research
1-404-842-1150, ext 222
Web site: http://www.pkfc.com/ /
3475 Lenox Road, Suite 720
3475 Lenox Road, Suite 720
Atlanta, GA 30326
Media:
Chris Daly
Vice President
Daly Gray Public Relations or
Vice President
Daly Gray Public Relations or
620 Herndon Parkway, Suite 115
Herndon, VA 20170
No comments:
Post a Comment