Analysts Say Supply Decrease Will Help Equilibrium In 2002

NEW YORK— During a panel entitled, Industry Stats: In A New York Minute, at the NYU Hotel Investment Conference being held here, Stephen Rushmore, president/founder of HVS International, and Randell Smith, CEO/Smith Travel Research, said that supply growth should level off within the next couple of years, which could be good news for current hotel owners. After a 4% growth rate over the last couple of years, supply is expected to drop and remain constant at 2.8% for the remainder of 2001. However, demand in 2001 is still not expected to meet or exceed supply, and is projected to level off at 2.1%. In addition, Smith said to expect very weak numbers for hotels this summer, especially in major urban markets. However, he is optimistic about 2002 and expects numbers to rebound, with improved occupancy and RevPAR. Rushmore agreed that supply is one of the major factors negatively affecting the lodging industry, but said that it should drop off for the remainder of the year due to the softening economy and decreased lending opportunities. Rushmore also gave his projections for the hottest markets in the United States in the near future, citing Albuquerque, Anaheim and Denver as his top three picks. He recommends building in Boston and Las Vegas, and selling in Salt Lake City and San Jose. —Diana Rodriguez