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PKF Predicts Mid-2010 Hotel Turnaround

ATLANTA-Researchers say lodging declines will end after nine straight quarters.

By Carl Cronan | Updated on August 14, 2009

ATLANTA-Nine consecutive quarters of declining lodging demand should come to an end in the second quarter of 2010, predicts locally based PKF Hospitality Research. But there’s a catch: Discounts on nightly rates have taken a firm hold on hotels, affecting room revenue through next year.

Luxury and upscale hotels, along with midscale hotels that don’t offer food and beverage service, are expected to see more customers coming back by the last three months of this year, says Mark Woodworth, president of PKF Hospitality Research. Midscale with food and beverage won’t see improved performance until next year’s third quarter, he adds.

“While the price paid for the room will remain the most important criteria for most travelers in 2010, the value received will once again factor into the buying decision,” Woodworth says. “Higher-priced hotels have suffered the greatest erosion in pricing power during this protracted contraction and, as a result, offer an abnormally strong value proposition.

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