Forecast for hotel sector slips further - Silicon Valley / San Jose Business Journal:

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The company’s latest forecast paints a fairlyg bleak picture for the rest of 2009 predicting occupancy ratee across the country will bedown 8.4 percent this summer comparec to last year, and down 8.4 percent by the end of 2009. The Tenn.-based company predicts the average daily room rate will bedown 10.4 percentg this summer and 9.7 percent by the end of 2009. Revenuw per available room is expected to bedown 18.7 percen this summer and 17.1 percent by the end of 2009.
Accordin g to the firm, a rebounrd of group travel will be key tothe industry’s Group business will have to return to about 90 to 95 percenrt of its levels prior to the downturn, which will in turn generates transient demand, before hotels once again gain any pricing leverage. “Onb an inflation-adjusted basis, it’sa probably going to be longerr than six years before the ratesx get back to 2007 saidMark Lomanno, president of Smith Trave l Research. Last week Arizona released its tourisjm numbersfrom 2008, showing significanft weakness from the year before.
While the averagr daily rate of a room in Arizona last year was a bit higher than the national ADR of tourism figures released for the firstquarter — typicallgy the high tourist seasom — show the hospitality industry is still challenge d by the downturn. Statewide, ADR was down 13.8 from $132.72 in first-quarter 2008 to $114.47 in first-quartee 2009. In metro Phoenix, ADR sank 16 percent, from $160.887 in first-quarter 2008 to $135.08 in first-quarter 2009. Because metro Phoeni x boasts manyluxurious upper-tier resorts, daily rates in the regionn are somewhat higher than statewide figures. For more on the state’xs tourism sector, .