The Refinishing Touch Blog

As we alluded to in Tuesday's post on the difficulties hotels are currently facing, the rough seas of the economy might be calming for the industry, and its lifeboat may not be far away.

Analysts are expecting the hotel industry to bottom out near the end of this year. This week Federal Reserve Chairman, Ben Bernanke, stated that he believes the recession is ‘likely over’. And as the economy trends up, so too inevitably will those travel and hospitality-related budgets.

Other good news: PricewaterhouseCoopers' (PwC) forecast, also announced this week, talked of improved economic conditions and expectations that lodging will stabilize throughout 2010. Occupancy is expected to rise 1.1% from 2009 levels (compared to a 5% decrease from 2008 to 2009). Despite continued pricing pressure, PwC expects demand to rise again and RevPAR (Revenue Per Available Room) will be fairly constant.

The hotel operators that weather the economy will find themselves in a tremendous position for growth and the opportunity to pick up discounted assets and as the economy continues recovery throughout 2010, they will be able to profit.

And there’s money out there. For example, the Starwood Property Trust raised $810 million in an IPO a few weeks ago [link] that it could invest in just those assets, LaSalle Hotel Properties has raised $260 million which could be used to make deals and Host Hotels & Resorts has more than $1 billion to throw into the ring. And Hyatt is looking to join with a planned $1.15 billion IPO.

Major chains are getting ready for the opportunity that is presenting itself, so the hospitality industry should take note: help is on the way, just hold tight.