Lodging Econometrics Forecasts Steep Decline in Hotel Openings

Lodging Econometrics has revised its 2010 forecast to predict the opening of just 717 hotels, with 82,620 rooms in total. The figure represents a 56 percent decline from the number of new openings in 2009 and is significantly lower than the company's earlier forecasts. The near disappearance of lending from local community banks is a major factor in the dip, analysts said. The number of projects under construction in the fourth quarter of 2009 -- 767, with 95,900 rooms -- is the lowest in more than four years. Project postponements and cancellations, meanwhile, are at "historical highs," LE reported. In a sense, this is good news for the industry, analysts noted, as the supply of new rooms will be much smaller than anticipated, allowing rates to recover more quickly.