Catching up on some random thoughts …

• OK, so now it’s official. The first quarter of 2009 experienced the worst year-over-year revenue per available room drop in the U.S. lodging industry’s organized history. Since 1987, when Smith Travel Research began tracking data, there have been four year-over-year quarterly declines of 10 percent or more: the first quarter of 2009 (-17.7 percent); the fourth quarter of 2001 (-16.3 percent); the third quarter of 2001 (-11.1 percent); and the first quarter of 2002 (-10.5 percent). Conversely, there have been two double-digit RevPAR growth quarters in history: Q1 2006 (+10.4 percent) and Q4 2005 (+10.0 percent).
• What that means is that not only did the industry experience a bad Q1 2009, it had a pretty good first quarter of 2008—remember, the industry’s average daily rate started softening around late April/early May last year. RevPAR for Q1 2008 was US$62.54, and it dropped to US$51.44 in the first quarter of this year.
• So, what does it mean for the future? With Q2 2008 RevPAR checking in at US$69.76, I expect a year-over-year decline in 2009. However, I would suspect the percentage of decline to come in a little lower than the minus 17.7 percent of Q1 2009.
• If you like data like this, make sure to check out our Hotel Data Conference in August, where you’ll be sure to get your fill of how the right data can help you maximize opportunities as the industry digs out of the recession.
• I’m still not convinced there won’t be some consolidation among real estate investment trusts by this time next year. Yes, we’ve seen some secondary stock offerings, but if the current economy continues, these real-estate heavy entities could collapse under the pressure of underperforming assets that have about half the value that they did 18 months ago. I see a couple of them being gobbled up.
• The number of unemployed hotel executives continues to grow at an alarming pace. There are many good people looking for jobs, and smart companies will find a home for some of them while they can possibly scoop them up at discounted prices. Adding bench strength and brain power during down times will more than pay for itself when the cycle turns.
• Will the luxury segment ever rebound? It’s not likely that it will happen any time in the next two years. And until the luxury segment recovers, the industry itself won’t experience boom times. The reason is simple: If luxury properties are hurting and continue to discount their rates, that puts downward pressure on hotels in other segments to do the same. However, one thing is different this time: Little corporate business is rushing to stay at luxury hotels because of the unfair stigma attached to them. The joke making the rounds is that luxury properties should take the “Resort & Spa” designator off their names and replace it with “Motel” to attract upper-end corporate business. The Arizona Biltmore Motel? The Broadmoor Motel? The Four Seasons Motel? Either we’re on Jersey Shore in the late ’50s or the hotel industry has hit the skids.
• At least one hotel has eliminated "resort" from its name after hearing from corporate customers who said the term "resort" carried too much of a high-dollar stigma in today's economic and political climates. According to an article in the Charlotte Observer, the Ballantyne Resort has been renamed The Ballantyne Hotel and Lodge. "Many of our customers are seeing a lot of pressure over meeting in hotels with the name 'resort,'" Joe Hallow, president of Bissell Hotels, which owns and manages the facility, told the newspaper. "We wanted to make it easier for our customers to meet where they want to meet." Hallow said the new name also does a better job of highlighting Ballantyne's 200-plus room hotel and its 36-room lodge meeting facility. It also recently added The Cottage at Ballantyne, a four-bedroom residence on the golf course for private or meeting use.The facility is upscale, but with room rates averaging around $225 to $250, it's less expensive than pricier locations around the country, Hallow said. The name change, however, doesn't mean Ballantyne is "downshifting on quality," he said.
• I don’t expect the financial sector to return to its pre-meltdown spending ways for four or five years. And that sector is a big driver for hotels. So whether you lean left or right, if you’re in the hotel industry, you have to hope President Obama’s bailout of the financial industry works simply to jump-start an ailing business.
• I was reminded the other day of Bank of America’s 147-room Ritz-Carlton being built in Charlotte, North Carolina. The Ritz-Carlton, Charlotte at Bank of America Center, is scheduled for completion in October. The 18-story hotel is being built to be LEED gold certified, and will have a bi-level penthouse wellness center and more than 12,000 feet of function space. It’s going to be a challenge for the hotel to open during this environment when luxury hotels are being demonized. The owner? Bank of America. So I guess that makes me and every other taxpayer a partner, right?
• The two sure signs in my book that the hotel industry is in trouble: half-filled airport parking lots and rental-car agency reader boards that have one column filled and eight columns empty. Until Corporate America starts hitting the road, something else is going to continue hitting the fan.
• And finally, social media is where it’s at, man. Hotels everywhere are in on the fun. You can find me and the other editors here on LinkedIn, Facebook and Twitter. Yes, I’ve begun tweeting. As I’ve explored the Twitter phenomenon, I’ve come across a lot of weird and crazy stuff. But nothing caught my attention quite like the Chicago area hospital that tweeted through a surgical operation. I suppose as long as the doctor is speaking to someone else who is tweeting his thoughts to the rest of the world, it’s OK. Unless of course it’s a vasectomy. That’s when I’d want the doc’s full attention.