Trends in the hotel industry continue to reflect the negative impact the recession has had on the industry. The revenue growth for many hotels has steeply dropped in the backdrop of global recession and persisting bad economic data.
Hotel owners and operators continue to see rooms across the country remain unoccupied as the economic contraction forces consumers to hold onto their cash and travel less, while companies cut back on business trips and events. However, there are some signs suggesting the downturn may be nearing a bottom as the pace of deterioration slows.
From HotelNewsNow: Economic research firm e-forecasting.com in conjunction with Smith Travel Research announced that following a decline of 3.7 percent in March, HIP went down 1.1 percent in April. HIP, the Hotel Industry’s Pulse index, is a composite indicator that gauges business activity in the U.S. hotel industry in real-time. The latest decrease brought the index to a reading of 84.2.
“With April’s reading of HIP, the hotel industry is creeping up to the weak performance of the industry during the recession in 1981-1982, which lasted 20 months. Even still, there is some promise in April’s reading as it appears the decline may have hit a bottom, looking at the six-month growth rate and monthly decline,” noted Evangelos Simos, chief economist of e-forecasting.com.
Chad Church, manager of industry research at STR, added, …”It looks as though we’ve hit a trough. Now the question becomes how long the industry will drag the bottom.”