Hotel Occupancy, Rates Expected to Fall in 2009

Calculated Risk (one of my favorite blogs for financial crisis play-by-play) links to a summary of a PriceWaterhouseCoopers forecast for the hotel industry.

PWC claims that drops in occupancy will be reminiscent of 2001, and a projected 2009 overall occupancy rate of 58.6% will be the lowest since 1971. They project a decrease in average daily room rates of 2.4 percent.

Empty hotels mean better award availability, better chances for suite upgrades, and better pricing deals (combined with loyalty program bonus offers). It also means more hotels dumping more inventory through opaque channels. It also means expect delays in renovation, delays in new hotel openings, and delays in introduction of new amenities.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. I am amazed how much rates have fallen in the San Francisco Bay area this past month.

    Le Meridien San Francisco at $119 is the lowest I’ve seen. The Palace, a Starwood Luxury Collection hotel has finally dropped back to prices not seen since 2006 ($136/night).

    The new InterContinental Monterey is as low as $117 per night (AAA rate) and this hotel was hoping for $300-$400 per night by the end of 2008. I had my doubts back in May about the economy supporting that kind of rate in 2009.

    2009 should be a suite year for a top level hotel loyalty program elite.

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