As occupancies rise and rates slowly creep up, hoteliers are getting optimistic about the rest of the year and beyond. While optimism can be contagious and beneficial, it has its limits, particularly in this economic environment.
The hotel industry got some good news and some troubling news last Friday. The good news was STR's release of industry operating results for the previous week. Occupancy rose 10.6 percent to above 60 percent, rates inched up 2.4 percent and RevPAR climbed an astonishing 13.2 percent. These were all heartening signs for the hotel industry's ongoing recovery.
Yet on the same day, the federal government released its latest jobs report, and the news was decidedly mixed. The only positive employment signs in July were the 67,000 jobs added in the private sector of the economy. The rest of the news was grim: the country recorded a net loss of 54,000 jobs and unemployment rose from 9.5 to 9.6 percent. Manufacturing accounted for 27,000 lost jobs, while financially strapped state governments shed 14,000 additional workers.
This jobs report and the other mostly depressing economic news we've heard lately should give hoteliers pause as they contemplate their futures. The economy, and ultimately the hotel industry, depends on the country's employment picture. Not until unemployment eases and businesses begin to hire workers in significant numbers will the economy and the mood of the country improve. These are the key data points—not hotel industry performance—you should focus on as you make your budget and operating plans for the coming year.