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PKF Forecast Sees Faster Declines

ATLANTA-The research firm revises its 2009 projections for lower hotel profit.

By Carl Cronan | Updated on October 29, 2008

ATLANTA-The protracted economic downturn has led locally based PKF Hospitality Research to revise its projections for lower profit and revenue next year. After predicting earlier this fall that lodging demand will decline for a second straight year, the firm now forecasts a profit decline of 7.9% in 2009 for US hoteliers, along with a 4.3% reduction in revenue per available room.

“The speed and severity of the downturn in the national economy, both that which has already occurred and that which is anticipated for the year ahead, has vastly exceeded our previous expectation,” stated Mark Woodworth, president of the research component of Boston-based PKF Consulting Inc. He points out that this is PKF Hospitality’s only other midterm update since the events of Sept. 11, 2001.

A 1.5% decline in lodging demand next year will be aggravated by a 3% rise in new supply, according to Woodworth, who participated in a GlobeSt.com Webinar on hotel operations strategies Oct. 22. Given increased competitive market conditions, he believes hoteliers will only be able to raise room rates by only 0.1% next year.

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