PHOENIX -- Some experts have begun to declare the recession over, but hoteliers expect their "street fight" to continue into 2010.
That’s the term Mark Crisci, executive vice president of K Partners Hospitality Group, used this week at the 15th annual Lodging Conference. Crisci summed up what appeared to be a widely held belief that the industry has a long road to recovery.
"2010 will be a street fight early on," he said. Crisci added that the industry will "get back to some level of profitability" by the end of 2010.
While most of the smaller-than-usual crowd in attendance seemed to concur with that industry view, analysts who closely watch demand, rate and occupancy numbers say the next two months will be the ones to watch.
"That’s when things started going south this time last year," said Mark Lomanno, president of Smith Travel Research.
If the year-over-year data continues to run negative, "that’s a negative on a negative," Lomanno said.
Steve Swope, CEO of Rubicon, which tracks advance bookings of the major hotel chains, said he is "starting to see things tick up a little bit."
"There is a little bit of daylight, but October is going to tell the tale," he said.
Industry executives and analysts expect occupancy and demand to start stabilizing. However, it is unclear when the rates freefall will end.
"That’s the $3 billion question," said Don Landry, owner of Top Ten Marketing and Hospitality Consulting. "When will they catch up?"
Lomanno noted that rates took six years to catch up after the 2001 downturn. At the end of 2010, he predicts that rates will still be down by nearly $15 from the 2007 high.
"It’s going to take a long time to close that gap," he said. Smith Travel Research expects revenue per available room to be down 17% for the year.
The other big question at the conference was when and if a tidal wave of hotel foreclosures will hit, and what kind of opportunities that would present.
"People want answers," said Harry Javer, president of the Conference Bureau, organizer of the Lodging Conference. "Normally they come to this conference to make deals. They are not in the throes of deal this year. So more of them are going to the panels looking for answers."
And with just 1,000 people registered – down from the 1,400 organizers said were in attendance ast year – the halls and meetings rooms had a quiet air of waiting. Most noticeably absent were a number of high-level of executives normally seen roaming the halls.
"Deals are being done; they’re just not happening on a grand scale," said Mark Williams, Best Western's vice president of development in North America. "Everyone is waiting for the bottom to hit."
Perhaps the only good news was the lack of any new bad news.
"The Phillies are going to make the playoffs again," said Lomanno. "Other than that, I don’t know if I have any good news."
This article has been corrected to insert the correct name of Best Western's vice president of development in North America, Mark Williams.