Hotel & Motel Management - December 27, 2007 - (Page 7) » BY STACY SILV ER, DIRECTOR, BUSINESS DE V ELOPMEN T Remain prepared for the unpredictable hen Heraclitus wrote, “Nothing endures but change,” he must have been thinking about the hotel industry. Since the turn of this century, the industry has gone through remarkable change. Expect more of the same, and then some, in 2008. We continue to see significant consolidation, a new wave of owners and a proliferation of new brands. To respond to this explosive change, HOTEL & MOTEL MANAGEMENT has created The Advisor to identify key players and provide an outlook for the industry. You’ll find a wealth of information on various segments of the industry. I recommend you keep The Advisor W handy for use as the definitive resource on the industry’s movers and shakers. As we enter 2008, the only thing that we can depend on is constant change. Interest rates, the subprime crisis, recession, the state of the development pipeline and consolidation are being discussed with various “what if” scenarios. PKF recently took these elements and created a “good news, bad news” forecast. If the economy holds up as expected, a typical hotel should experience compound annual growth in room revenue of 5.5 percent through 2010. If we enter a recession, that growth rate would slow to 2.2 percent. The better news is that the typi- cal hotel shouldn’t lose revenue if a downturn occurs. The difference between the best- and worst-case scenarios is a spread of 9.6 percent. Keep that better news in mind. If the economy decides to take a breather, don’t panic and immediately start slashing room rates. That creates a downward spiral that can take years from which to recover. Occupancy might suffer slightly, but by holding firm, your hotels will be in a much better position to benefit from the inevitable upturn. ssilver@questex.com WORLD CLASS FF&E/OS&E PURCHASING SOLUTIONS PERFORMED WORLDWIDE Accuracy Integr ity Reliability www.benjaminwest.com BOULDER | CHICAGO | DALLAS | HONOLULU | LONDON http://www.benjaminwest.com http://www.benjaminwest.com http://www.benjaminwest.com
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