The Real Deal Miami

Good riddance to 2009 for hotel industry

By Michael Stoler | January 26, 2010 05:58PM

Hoteliers are overjoyed that 2009 has come to a close.

“Good riddance to 2009, a year which we believe will go down as the worst in the modern hotel industry,” said Mark Lomanno, the president of Smith Travel Research.

“The combination of a distressed economy in conjunction with panic pricing drove [revenue per available room] down to levels that were virtually incomprehensible just a year and a half ago. I look for a significant improvement in the key performance indicators in 2010.”

A total of 46 new hotels are scheduled to open in 2010 in New York City. On Jan. 18, the official opening was held for the Andaz Wall Street, Hyatt’s newest brand, and the only hotel so far on Wall Street. The hotel sits in the former JPMorgan headquarters at 75 Wall Street.

In June, the 184-room, Andaz 5th Avenue will open at 485 Fifth Avenue near the New York Public Library.

According to STR, revenue per available room fell 16.7 percent to $53.71 during 2009. The national hotel market failed to register any year-end increases in any of the three hotel metrics of occupancy, average daily rate and revpar for the top 25 hotel markets in 2009. The industry’s room occupancy fell 8.7 percent to 55.1 percent for the year and the average daily rate fell 8.8 percent to $97.51. The worse decline was registered for the revpar which fell 16.7 percent to $53.71.

New York City registered the largest decrease in average daily rate for the top markets, falling 21.8 percent to $215.14. The city also ended the year with the largest decrease in revpar, down by 26.3 percent to $166.11.

In December, occupancy fell 1.9 percent to end the month at 44.2 percent in year-over-year measurements. The average daily rate dropped 6 percent to finish the month at $93.72, while the revenue per available room decreased 7.8 percent to $41.16.

The outlook for 2010 is brighter for the hospitality industry. For the week ending Jan. 16, New York City registered the highest increase in hotel occupancy rising 15.3 percent to 70 percent. New York also saw the largest increase in revenue per available room, or revpar, year-over-year — jumping 7.1 percent to $131.81.

Michael Stoler is a columnist for The Real Deal and host of real estate programs “The Stoler Report” and “Building New York” on CUNY TV and on WEGTV in East Hampton. His radio show, “The Michael Stoler Real Estate Report,” airs on 1010 WINS on Saturdays and Sundays. Stoler is a director at Madison Realty Capital as well as an adjunct professor at NYU Real Estate Institute, and a former contributing editor and columnist for the New York Sun.