Snappy newsletters. Simple Facebook sharing. Spirited comments. Sweet features are waiting… GET THEM NOW!

Extra Room at the Inn as Hotel Biz Slows Down

Demand may be checking out as new rooms keep opening

By Rob Quinn,  Newser Staff

Posted Mar 19, 2008 10:34 AM CDT

(Newser) – The hotel business is heading for a downturn just as thousands of new rooms are about to open, the Wall Street Journal reports. One expert sees a .9% fall in demand for hotel rooms this year as the slowing economy keeps travelers at home—the first significant slump since 9/11.  At the same time, as many as 260,000 new hotel rooms are slated to come on line this year and next—a 4.6% increase in supply.

"When you put together the supply-and-demand numbers, it's kind of scary," he says. The result is likely to be a decline in revenue per room across the industry—not big trouble for chains like Intercontinental, who can offset a fall in per-room income by building more rooms, but it could mean tough times for boutique hotels and losses for investors in condo-hotel projects.

An expected fall in occupancy rates will be bad news for people who invested in condo-hotel rooms - hotel rooms that get sold off one at a time.
An expected fall in occupancy rates will be bad news for people who invested in "condo-hotel" rooms - hotel rooms that get sold off one at a time.   ((c) Aaron Gustafson)
Reports on the hotel industry say that occupancy rates will drop off just as hundreds of thousands of new hotel rooms open this year and next.
Reports on the hotel industry say that occupancy rates will drop off just as hundreds of thousands of new hotel rooms open this year and next.   (Shutter Stock)
Construction of a second hotel tower is seen at Trump Taj Mahal Casino resort in Atlantic City, N.J. early Wednesday, Nov. 14, 2007.
Construction of a second hotel tower is seen at Trump Taj Mahal Casino resort in Atlantic City, N.J. early Wednesday, Nov. 14, 2007.   (AP Photo/Mel Evans)
« Prev« Prev | Next »Next » Slideshow
To report an error on this story, notify our editors.
A snapshot of the day's best news stories.
 
COMMENTS
Be the first to comment on this story.

More Newser Stories

Woman Kills Son, 8, in Posh NYC Hotel: Cops

UK Holiday Inns Offer Human Bed-Warmers

8 Infamous Hotel Rooms

Death Toll Rises to 11 In Pakistani Hotel Blast

Recession Pits Luxe Hotels' Owners Vs. Operators


NEWS FROM OUR PARTNERS
Other Sites We Like:   24/7 Wall St.   |   Betty Confidential   |   BuzzFeed   |   Cracked   |   Fark   |   Timelines   |   The Frisky   |   Geek Sugar   |   NewsOne