Profit Growth Expected to Slow to 2.9 Percent in 2008ATLANTA, GA– PKF Hospitality Research (PKF-HR) announces the average hotel in its 2008 edition of Trends in the Hotel Industry survey enjoyed a 7.2 percent gain in Net Operating Income (NOI) in 2007.
While this bottom-line improvement was more than twice the pace of inflation for the year, the single-digit gain was the lowest year-over-year increase since 2004 and is further evidence of a projected slowdown in hotel income that PKF is forecasting for the near future.
“Throughout 2007, hotel owners and operators were increasingly concerned about downtr
ending occupancy levels compared to 2006 and a slower pace of ADR growth, and their potential impact on 2007 profitability. Despite these concerns, year-end results indicated that the typical U.S. hotel was able to achieve gains in revenue and profits above their respective long-term averages,” said Mark Woodworth, (top right photo) president of PKF Hospitality Research.
“Throughout 2007, hotel owners and operators were increasingly concerned about downtr
ending occupancy levels compared to 2006 and a slower pace of ADR growth, and their potential impact on 2007 profitability. Despite these concerns, year-end results indicated that the typical U.S. hotel was able to achieve gains in revenue and profits above their respective long-term averages,” said Mark Woodworth, (top right photo) president of PKF Hospitality Research. “2008 may be a different story in view of the difficult economic outlook for the remainder of this year, and the dampening effect it will have on U.S. hotel revenue growth. Managers will be hard pressed to grow profits in 2008.”
According to Smith Travel Research, RevPAR was up just 1.9 percent through the first quarter of 2008 compared to the same period in 2007.
According to Smith Travel Research, RevPAR was up just 1.9 percent through the first quarter of 2008 compared to the same period in 2007.
With poor prospects for summer travel, the second quarter 2008 Hotel Horizons report of PKF Hospitality Research is forecasting an annual increase in RevPAR of just 1.5 percent. This RevPAR forecast is the result of a projected 2.5 percent decline in occupancy, combined with a 4.0 percent increase in ADR.
(The complete Trends report is available at PKF's web site, www.pkfc.com/USALIchanges. Additionally, a complete copy of the PKF news release may be obtained from the contacts below)
CONTACTS:
Julie Tullbane, Daly Gray Public Relations, T 703 435 6293, F 703 435 6297, julie@dalygray.com
Chris Daly or Jerry Daly (media), Daly Gray Public Relations, 620 Herndon Parkway, Suite 115, Herndon, VA 20170, T 703 435 6293
Mark Woodworth, President, PKF Hospitality Research, 3475 Lenox Road, Suite 720, Atlanta, GA 30326, T 404 842 1150, Ext. 222.
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