Revenue per available room, known in the industry as revpar, plunged 17 percent in 2009, according to Smith Travel Research, the biggest annual decline since the firm began tracking the data in 1987.
(Hotels are always trying to maximize RevPAR, or the revenue pulled in from each available room).
Colliers, the research firm, expects revpar to climb 5.9 percent in 2011 and 10.6 percent in 2012, and rates to rise 3.8 percent in 2011 and 6.3 percent in 2012.
"With even just a modest acceleration in industry lodging trends elsewhere in FHR's portfolio, we expect to see significant RevPAR and margin improvements in 2004 for FHR as a standalone entity".
All three possibilities look bad, with a severe dropoff in demand and a slow recovery in revenue per available room, or RevPar.
Other data sources, too, have reported similar trends, calling out record occupancy and room demand at U.S. hotels, along with a five-year growth trend in revenue per available room (RevPAR).
IHG is a quality operator, but when RevPAR turns, all hotel stocks de-rate sharply, which in the last downturn was to 8-9 timEBITDATDA (versus IHG currently on 12 time 2017e).
Although he thinks 2006 will be the peak year in what has been a strong upcycle, with RevPAR (revenue per available room) growing at its fastest pace since 1987, the sector is not going to lose significant luster anytime soon.
InterContinental said on February 17th that its "revpar"—revenue per available room, the industry's benchmark fell 6.5% in the fourth quarter.
