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Article: Don't worry about room rates. (Hotel Investment Strategies).(hotel industry, room rates and occupancies; analysis, statistics)
- Article from:
- Hotels
- Article date:
- May 1, 2003
- Author:
CopyrightCOPYRIGHT 2003 Reed Business Information, Inc. (US). This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Every time the hotel industry experiences declining occupancies followed by falling room rates, many hotel owners, operators and lenders fear room rates will never fully recover. They think that some major underlying change in travel patterns and pricing has occurred, and the glory days of rapidly rising room rates are gone forever.
Based on my 35 years of following the hotel industry through a number of major cyclical changes, I do not think the recent decline in room rates is any indication of a long-term problem. Rather, over a relatively short time frame, I predict a rapid room rate recovery will occur that will significantly enhance hotel profits and values.