Based on the initial newsfeeds coming out of the 2009 Lodging Conference, for the beleaguered hotel industry – and travel affiliate marketers that sell hotels and resorts – the lodging industry’s recovery won’t come any time soon.

The Lodging Conference, considered by many to be the premier hospitality industry event that draws the top ‘hotel owners, chain executives and dealmakers’ from around the world, kicked-off on Tuesday, September 22 at the Arizona Biltmore in Phoenix.  So far, a bevy of very high-profile hotel industry executives and hospitality experts have confirmed what many folks in the travel and travel affiliate industries are thinking – that although the Fed and Wall Street may be signaling that the recession has technically ended, these acclamations bear little – if any – relevance to the state of affairs in the U.S. hotel industry.

To quote Donald Rumsfeld, “There are things we know we know, and there are things we know we don’t know.”  With regards to the executives attending the Lodging Conference (and, we hasten to add, for thousands of travel affiliates that offer hotel and resort affiliate programs), the burning question is: When will the lodging industry come out of its tailspin?  Based on the reports coming back from journalists and twitterers in attendance at the conference, the ‘answer’ seems to be: no one really knows for sure, though some are willing to make tentative predictions.

According to the presentation given by hospitality guru Mark Lomano of consultancy Smith Travel Research (STR), it will take “…probably 10 years before [hotel] rate is up to inflation-adjusted levels.”  To substantiate his viewpoint, and to put the severity of today’s economic situation into  proper context, Lomano pointed out that  it took six years for hotel rates to catch-up in the aftermath hotel industry experienced as a result of the far-milder post-2001 downturn.

STR also forecasts U.S. 2009 occupancy to be down 8.4%, while average daily rate (ADR) will drop 9.7% and revenue per available room (RevPar) down by a stunning 17.1%.  Lomano also noted that the US hospitality industry will finish 2009 with an ADR of $96.43, down considerably from the $100 achieved in 2008.  Moreover, 2010 looks even bleaker: STR forecasts ADR to drop even further throughout next year, with ADR finishing the year even lower than 2009, at an eye-popping $93.16.

PKF Hospitality Research, another of the leading hospitality consulting firms, is slightly less pessimistic; they forecast occupancy to decline by 6.5% by the end of this year, with ADR and RevPAR down 11.4% and 17.1%, respectively

Similar gloomy views were echoed by many hospitality company executives in attendance at the Conference, which finishes Friday, September 25. “2010 will be a street fight early on,” said Mark Crisci, executive vice president of K Partners Hospitality Group, adding that the industry will “get back to some level of profitability” by the end of 2010.  Tom Corcoran, chairman of FelCor Lodging Trust, was a bit more sanguine about rates; during the View From the Top general session panel discussion, he acknowledged that “Rate is the single biggest problem we have,” but then went on to note that following every downturn, “We have a great upturn. It’s not ‘if’ but ‘when” the upturn occurs.

Given these projections and estimates, what should travel affiliates do?  TravelDividends suggest that, despite the short-term issues plaguing the lodging industry, you take a long-term perspective on your business and build with an eye for the future.

Regardless of how long it lasts, downward pressure on hotel and resort rates – whether here in the U.S. or internationally – translates into measurable value and savings in the eyes of many travelers.  So should it for you.  In our experience, it is during economically uncertain times like these that really savvy business people build superior products, services and this is very important – competitive advantage.  By working closely with your hotel supplier partners and affiliate networks to fine tune your hotel affiliate programs and product portfolio, you too can come out of this recession with a larger, healthier and more profitable travel affiliate business.

TravelDividends believes that the winners will be those travel affiliates who take a long-term perspective; travel affiliates that resort to shortsighted practices or quick-win attitudes are ultimately doomed to fail.  So, take advantage of the opportunities wrought by these uncertain times and take your business to the next level.

Where do you fall on this issue?  How have your hotel and resort affiliate programs been affected by the global economic maelstrom?  What strategies and tactics have you been employing to weather this economic storm?  We’d appreciate hearing from you and sharing your thoughts and experiences…many thanks!

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