Mr. Rose: It's very bad. It is pretty much unprecedented, what we're seeing in the industry right now. As you know, the key metric that we look at is RevPAR, or revenue per available room. We think in 2009, RevPAR will decline by 18% to 20% and will likely fall modestly in 2010. I would compare that to the fallout after 9/11, when RevPAR declined 7% in 2001 and about 3% in 2002 before flatting out in 2003. So this is really much worse than what we've seen in recent times.
TWST: Is there anything positive going on in lodging?
Mr. Rose: We did see a property sale by Starwood (HOT) recently, selling the W
Hotel in San Francisco at an approximate 5 cap rate, or capitalization rate.
That looks like pretty good pricing to us. It does show that there are some
buyers who remain well-financed and there are some properties that are
desirable. But I would say the good news is slim and few and far between.
Tickers included in this excerpt: HOT, HST, Mar, NST, SHO
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