The year was 2008 and the nation was in a serious financial crisis. Very few financial institutions were interested in providing financing for any real estate class. If the subject was financing for a hotel, the lender might have made the following remark: “Do not pass go, do not collect $200 and make certain never to talk to me about financing a hotel.” At the beginning of the year, I wrote an article entitled “Good riddance to 2009 for the U.S. hotel industry.” In it I quoted Mark Lomanno, the president of Smith Travel Research, when he said, “Good riddance to 2009, a year which we believe will go down as the worst in the modern hotel industry. The combination of a distressed economy in conjunction with panic pricing drove [revenue per available room, or revpar,] down to levels that were virtually incomprehensible just a year and a half ago.”

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The
Intercontinental Times Square
is set to open
in July.

From the March issue: Just as New York City’s painful and protracted hotel sector slump finally seems to be hitting bottom, the industry has a new problem on its hands: It’s about to be slammed with a dramatic increase in new hotel rooms.

Research by The Real Deal and by hospitality analyst HVS found at least 28 new hotels slated to open this year or next. The largest is the more than 600-room Intercontinental Times Square, which is set to debut in July; the smallest is the boutique 56-room Habita Hotel on the High Line on the West Side.

Meanwhile, another nine are in the works with unknown completion dates. Smith Travel Research estimates the increase of rooms in New York at
5.1 percent, while PKF senior vice president John Fox puts the increase
at a possible 8 percent, with 5,000 to 6,000 new rooms set to be added
to Manhattan’s roughly 72,000 existing rooms available per night. The
jump, Smith estimates, is the largest annual increase in hotel supply
in Manhattan since 1987, the year the firm set up shop. [more]

When George Fertitta was named the head of New York City’s main tourism and travel agency, NYC & Company, in 2006, the former advertising executive likely had little idea what kind of economic tableau awaited him. But the economic downturn meant rearranging the way the city did tourism, and Fertitta says he was determined to help the New York travel and hospitality industries survive. “Our job was to weather the storm and figure out a way to take advantage of it,” Fertitta said. And while the city’s hotel industry has certainly taken some hits, last year’s 80 percent occupancy rate was impressive to many industry insiders. Moving forward, Fertitta said he hopes to see the city reach 50 million visitors by 2012.

If there’s a bright side to the national housing crisis, it’s in the luxury vacation rental industry. Indeed, many of the hardest hit real estate markets are showing the biggest uptick in vacation property listings intended as second homes, but which are now for rent, often as a means of economic survival. Despite the challenging economy, nearly two-thirds of vacation rental homeowners reported summer bookings were the same or higher than last year, according to a second-quarter report by HomeAway, a national vacation rental company headquartered in Austin, Texas. “There are a lot of people who extended themselves to buy vacation properties [who] never intended to rent them out, and now they find themselves in a position where renting makes financial sense,” said Brian Sharples, CEO of HomeAway. more

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The U.S. hotel industry will hit the bottom of its current cycle soon,
according to a Hotel Horizon report released today by PKF Hospitality
Research. The report predicted that revenue per available hotel room,
or revpar, will hit the low point of the cycle in the third quarter of
this year. The industry’s declines will likely total 17.5 percent in
2009, making it the weakest year on record, with a subsequent 3.5
percent decline in 2010. TRD [more]