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Study Ties Hotel Demand to Airlines

ATLANTA-PKF Consulting asserts that declining flight capacity could cause a lodging slump worse than post-9/11.

By Carl Cronan | Updated on July 10, 2008

ATLANTA-Researchers with PKF Consulting Inc. are making the assertion that the nation’s hospitality industry is facing a deeper slump than the period after Sept. 11, 2001, judging from current declines in airline capacity. However, industry observers counter that there are plenty of other variables to lessen the perceived decline.

Mark Woodworth, president of Atlanta-based PKF Hospitality Research, says his firm figures a 3.9% decline in US hotel demand if airline capacity falls by 10%, due to cutbacks in capacity announced by major carriers. Such a reduction would translate to approximately 40 million fewer room nights, or $4.3 billion in lost revenue on an annualized basis, he says.

“To put this in perspective, the decline in lodging demand experienced in 2001 was just 3.3%,” Woodworth said in releasing his firm’s latest analytical data this week. “With losses like this, hotel operators would be forced to make drastic cutbacks in staffing and other operating costs.”

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