2008 - GOOD NEWS, BAD NUMBERS
Fixed Costs A Problem In 2009

The good news is that when faced with lower levels of business in 2008, U.S. hotel managers cut operating costs by 0.3 percent. Unfortunately, total hotel revenues dropped 1.3 percent, resulting in a 3.8 percent decline in net operating income for the average U.S. hotel according to the 2009 edition of Trends® in the Hotel Industry . Given the depth and breadth of the continuing economic downturn, further expense cuts will not be enough to offset the anticipated declines in revenue in 2009.

Forecasts of a double-digit decline in rooms revenue per available room (RevPAR) during 2009 are troubling enough. However, for the lenders, owners, and managers of U.S. hotels, the real concern is the impact on profitability. While the fall-off in lodging performance was not as great last year as it will be in 2009, an analysis of the 2008 data could prove instructive as a guide to how U.S. hotel managers will react this year as business levels continue to deteriorate.

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Are You Paying Too Much For The Following Expenses?

• Labor Costs
• Utilities
• Property Taxes
• Insurance

We have the answers.

Purchase your copy of the 2009 edition of Trends® in the Hotel Industry report. Analysis is based on the industry’s oldest and most detailed database of operating statistics.

For more information visit our website at www.pkfc.com/buyAnnualTrends, or call contact Claude Vargo at (866) 842-8754.

Do You Know What Is Going To Happen Next Year?

Special Forecasts Included for Airport, Highway,
Urban, Surburban, Rural, and Resort Hotels

Hotel Investment Criteria In 2009

• Cap rates are on the rise.
• Debt coverage ratios remain high.
• Investors are pricing full-service hotels higher than limited-service.
• The cost of capital has increased.
• The average loan term has shortened.
• Conservative underwriting is prevalent.

These are just a few of the findings from the recently completed 2009 Hospitality Investment Survey conducted by PKF Consulting. The survey took the pulse of hotel buyers, sellers, and lenders that have been active in the market during the later part of 2008 and early 2009. To purchase a copy of the 2009 Hospitality Investment Survey, please visit www.pkfc.com/buyHIS.