Industry Forecast
Posted: November 16, 2009
Reed Woodworth of PKF Consulting, Inc presented “Industry Forecast” Thursday, November 12th at NEBTA’s morning meeting in Bedford, MA at the Doubletree. Mr. Woodworth discussed; The Economy, A Review of Recessions, Industry Performance, & Business Traveler Issues. He used the U.S. hotel industry as the focus of his remarks.
Highlights from the presentation:
· Turning Point: Projecting there won’t be job growth until 4th quarter 2010
· Areas that are projected to recover quicker are San Antonio, Raleigh Durham, and Seattle due to Military presence.
· The increase in hotel supply right now during a bad economy is due to these projects being started while times were good. We will see a significant decrease in new projects years coming due to the economic situation now.
· We are still looking at Recovery beyond 2013
· “How long will it take to get rid of the AIG affect?” Companies are looking closer at travel expenses. Also the government is looking closer at travel expenses. This is not going away anytime soon.
· How does Boston compare?
· According to the September 2009 Monthly trends in the Hotel Industry report for Boston:
· Business travel comprised 29.3 percent of occupied rooms in 2009, as compared to 26.1 percent in 2008.
· Business travel demand has increased by approximately 9.7 percent.
· However, ADR across all segments, including business travel, has fallen off substantially.
· Respondents from the 2010 US Business Travel Buyers’ Cost forecast expect hotel rates to decline 2 to 8 percent in the next year.
· Average rates for the overall Boston market share expected to decline 0.1 percent, with rates flat for upper priced hotels and declining 0.7 percent for lower priced hotels.
Information obtained from the open discussion;
· Europe will recover faster from the recession. They have the ability to adjust bank laws quicker and also Asia’s economy is stable. PKF projects travel from those markets will strengthen especially with the weak dollar.
· Teleconferencing; with the new demands of high tech we see what the travelers expect when traveling. They need the high speed connections, the availability to Skype or web conference. Industry doesn’t have the data to see what effects teleconferencing have directly on travel.
