June 28, 2004—Fifty-one percent of respondents says potential terrorism attacks and 35 percent says the economy are the biggest threats to a full recovery of the worldwide hospitality industry, in a survey of executives attending New York University’s 26th Annual International Hospitality Industry Investment Conference.
A majority (62 percent) believes that overall recovery of occupancy and ADR (average daily rate) to 2000 levels is 1 to 2 years away, and 51 percent say an increase in the RevPAR (revenue per available room) is the measure to watch, indicating when a recovery is under way.
Sponsored by the NYU Preston Robert Tisch Center for Hospitality, Tourism and Sports Management, the Conference will be attended this year by over 1,500 mid- to senior-level executives involved in the real estate, hotel investment and development sides of the industry.
“Our survey found this group cautiously optimistic, but still worried about the specter of terrorism and a lagging US economy on the industry’s recovery. Further, they point to interesting sector trends, namely that Asia and the Pacific Rim will enjoy increases in investment and that the upper upscale will remain a focus of investment growth.”
Revival of corporate travel (63 percent) and the rate of job growth (22 percent) are the factors cited as having the greatest effect on the pace of recovery.
Respondents said that REITs, both public and private (40%), and opportunity funds (20%) will be the most active buyer groups for hotels during the recovery.
Sixty-four percent of the respondents say that upper upscale and upscale will be the service segments that will experience the greatest investment activity over the next six months. Urban (52 percent) followed by suburban (33 percent) will be the most active geographic segments during the same six-month period.
