At Smith Travel Research’s recent Hotel Data Conference, one of most popular sessions was the final general session where STR, PKF Hospitality Research and PricewaterhouseCoopers all presented our U.S. hotel industry forecasts for the remainder of 2009 and 2010. Typically, industry conferences tend to limit the number of organizations that present this type of data. This is certainly understandable as conferences tend to be a bit constrained by the demand for a broad program and the tendency to avoid redundant content.
However, with the three organizations represented together on stage, attendees were provided a real opportunity. Not only were they better able to understand the underlying fundamentals of each forecast and their underlying assumptions, but they were also able to compare and contrast the relative merits of each forecast. While the absolute revenue per available room results were not all that different among the three of us, it immediately became clear that how we arrived at those results were substantially different.
In addition, while we each expect a turnaround sometime in 2010, the timing and drivers of any recovery were debated, and it very quickly became clear we each had a particular bias as to what those drivers were and their perceived impact.
For me, the drivers of any economic recovery, at least as far as the hotel industry is concerned, are primarily corporate profits and continued stock market strength. For others the important factors were a stabilization/improvement in housing values and unemployment numbers. Certainly while each of these will play a part in any meaningful recovery, the audience was provided a glimpse into our thinking, thus enabling them to come to their own conclusions.
Another area discussed was the timing and quality of any turnaround. Conversation about this topic centered on the industry’s ability to regain pricing power and how quickly the ground lost in the average room rate could be regained. While none of us expected a quick room-rate recovery, there was a range of opinions about how that might play out in the future.
All in all, it was a fun session that was very well received and helped me, for one, to appreciate the merits of a close examination of competing industry forecasts and to not remain too focused on a singular forecast—even if it is ours.
Watch portions of the Hotel Data Conference general session in four parts:
- Mark Lomanno, STR’s forecast
- Mark Woodworth, PKF’s outlook
- Scott Berman, PwC’s forecast
- Audience Q&A
