Mark Woodworth, the executive vice president of PKF Consulting, told the Atlanta Convention & Visitors Bureau that 2009 will be worse for the city’s hotels than the company predicted just a month ago.
The latest economic data indicates that Atlanta will face five straight quarters of job losses, which will peak in the second quarter of 2009. This, coupled with shrinking personal incomes and tightening corporate travel budgets will be a severe blow for Atlanta’s hotels.
In September, before the collapse of Wall Street, PKF predicted Atlanta would see minimal growth in occupancy and revenue per available room, overall in 2009, before a rebound in late 2009 and 2010.
Now, PKF predicts occupancy rates in Atlanta will drop to 57.6 percent, off four points from previous projections. Average daily rates are expected to slide by 1 percent instead of seeing a slight gain.
RevPAR, a critical measure of hotel health, is now forecast to drop 4.5 percent, instead of a slight increase.
Woodworth said he expects the Atlanta market to recover in mid 2010. That recovery will likely outpace the national average, he said.
According to the ACVB, hotel occupancy is down 5.1 percent year to date through August, the latest data available. Occupancy is down 7.6 percent in August compared to the same month last year.
Every hotel segment is down, from high-end properties in Buckhead to convention hotels in downtown and near Hartsfield-Jackson Atlanta International Airport. Convention hotels are off 1 percent for the year and saw a 5.9 percent drop in August. Most dramatically, RevPAR for the largest hotels was down 9.3 percent for August.
Tradeshow attendance is also down overall.
Attendance to The International Woodworking Machinery & Furniture Supply Fair, one the city’s largest trade shows, was off nearly 20 percent, according to the ACVB.
Some shows, particularly medical and education conventions, are actually up.