No recovery yet for hotel industry
After a year of falling profit margins, some believe that the hoteliers are not even close to a recovery. In the worst downturn since the great depression, hotels across Orlando are beginning to crumble under the strain.
Hotels with solid marketing skills have been closing their doors including the Knights In and Legacy Grand Resort with still more in foreclosure.
According to statistics, 2nd quarter Orlando room occupancy in June was just 64%, a decline of 7.8% compared to the same quarter in 2008. Likewise, room rates declined 11.7% to just $89 per available rooms while the key marker revenue for available rooms sank to 18.7%.
During 2009, a plethora of factors acerbated falling profits including the recession, swine flu epidemic, and the unwritten blacklist in Washington.
Over the last 12 months, some Hoteliers think that historically it is the worst perfect storm ever to hit Orlando. Analysts that track top 50 U.S. markets also said that the steady declines in June 2008 is eroding hotel rooms. It's basic economics 101, demand is down and room occupancies are up.
According to some banks, commercial real estate loans that have been bundled in securities have been delinquent in Orlando ranking nearly 254 in the country. And just a mere 8 hotels continue making loan payments without profits out of 58 major hotels in Orlando not including Disney.
There is a need for a sense of urgency, too much complacency in the hotel business said one hotel management company that compiles and analyzes statistics. As things continue in a downward spiral, more foreclosures are possible as huge mortgage loans are defaulted.
In an effort to stave off foreclosures, some financial institutions have been extending loans for major hotels.
Currently, investors hoped that their hotels will remain stable, even though research agencies speculate that hotels will maintain a negative forecast through 2010.
Albeit, the proverbial "negative hole" that we find ourselves in is deeper than most, the resilience of Orlando should cause it to come out sooner.
Hotels with solid marketing skills have been closing their doors including the Knights In and Legacy Grand Resort with still more in foreclosure.
According to statistics, 2nd quarter Orlando room occupancy in June was just 64%, a decline of 7.8% compared to the same quarter in 2008. Likewise, room rates declined 11.7% to just $89 per available rooms while the key marker revenue for available rooms sank to 18.7%.
During 2009, a plethora of factors acerbated falling profits including the recession, swine flu epidemic, and the unwritten blacklist in Washington.
Over the last 12 months, some Hoteliers think that historically it is the worst perfect storm ever to hit Orlando. Analysts that track top 50 U.S. markets also said that the steady declines in June 2008 is eroding hotel rooms. It's basic economics 101, demand is down and room occupancies are up.
According to some banks, commercial real estate loans that have been bundled in securities have been delinquent in Orlando ranking nearly 254 in the country. And just a mere 8 hotels continue making loan payments without profits out of 58 major hotels in Orlando not including Disney.
There is a need for a sense of urgency, too much complacency in the hotel business said one hotel management company that compiles and analyzes statistics. As things continue in a downward spiral, more foreclosures are possible as huge mortgage loans are defaulted.
In an effort to stave off foreclosures, some financial institutions have been extending loans for major hotels.
Currently, investors hoped that their hotels will remain stable, even though research agencies speculate that hotels will maintain a negative forecast through 2010.
Albeit, the proverbial "negative hole" that we find ourselves in is deeper than most, the resilience of Orlando should cause it to come out sooner.
posted by michael at
10:55 AM
