While the outlook from ALIS has been only so-so, at least one U.S. hotel industry leading indicator is projecting some improvement. The Hotel Industry Leading Indicator, or HIL for short, went up 1.8 percent in December, marking the metric’s ninth consecutive monthly increase.
HIL, a monthly leading indicator developed by e-forecasting.com in conjunction with Smith Travel Research, is a composite leading indicator that, on average, leads the industry’s business activity four to five months in advance. The latest increase brought the index to a reading of 109.4. The index is set to equal 100 in 2000.
Read “Hotel Industry Leading Indicator shows promise in December.”
The U.S. hotel industry reported decreases in all three key performance metrics during the fourth-quarter of 2009 in year-over-year measurements, according to data from STR. The industry’s occupancy dropped 4.4 percent to 50.6 percent, average daily rate fell 7.6 percent to US$95.79, and revenue per available room decreased 11.7 percent to US$48.50.
Among the Chain Scale segments, the Luxury segment was the only segment to report an increase in any of the three key metrics. The segment’s occupancy rose 1.4 percent to 60.6 percent. The Upper Upscale segment ended the quarter virtually flat with a 0.1-percent decrease to 61.1 percent.
Read “STR reports US performance results for fourth-quarter 2009.”
Experts at the Americas Lodging Investment Summit agree 2009 was a quiet year for transactions. But they couldn’t reach an agreement over just how strong the rebound will be—if there is one in 2010, according to HotelNewsNow.com’s Shawn A. Turner.
The biggest challenge: a lack of willing sellers. Though pundits at last year’s conference predicted a flood of distressed assets entering the market, that simply hasn’t been the case. More often than not, lenders are better off from a value standpoint by holding onto the property rather than selling into the current market, said Robert B. Stiles, executive VP and principal of real estate services firm Cushman Wakefield Sonnenblick Goldman.
“I think you’re going to be surprised at how long some of these lenders will hold assets,” he said. “We’ve heard some special servicers say, ‘If we have to, we’ll hold onto it for 10 years.” Stiles added that loan maturities are still being pushed farther out by lenders.
For more on the subject, read “Another stagnant year ahead for transaction activity.”
While many within the industry have been championing a return to the basics during the recession, it looks as though there’s more work to be done in the realm of customer service. According to a 2009 Accenture Global Customer Service survey, 51 percent of travelers were unsatisfied with customer service at hotels. In addition, 60 percent of those surveyed saw no signs of effort from the industry to improve.
This means that roughly one half of the industry’s customer base had a bad view of customer service with no hope or indication that it would improve. This is an alarming number, considering hotels lose approximately US$1,071 for each traveler they lose to a competitor, according to the survey.
Starwood Hotels & Resorts Worldwide plans to open 80 to 100 mostly high-end hotels this year, with 70 percent outside North America and most of those in the Asia Pacific region.
The hotel operator plans to double its portfolio in China by 2012, and expects to open 30 properties in the region this year. Starwood has already opened 25 hotels in India and plans to increase its presence there by 60 percent by 2012.
The hotel operator opened more than 160 new hotels during the past two years, including 83 in 2009. Starwood has 982 properties in more than 100 countries.
Read "Starwood Hotels & Resorts Slated to Open 80-100 Hotels in 2010."
Compiled by Patrick Mayock.