Industry Update
External Article17 March 2010

Industry uses wrong metrics to project RevPAR

By Joel Ross , President at Citadel Realty Advisors

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The prognosticators for the industry completely missed the worst decline in revenue per available room in history and the entire economic collapse. Even as late as 2008 at the Americas Lodging Investment Summit and the New York University International Hospitality Investment Conference, they were still predicting upward movement in RevPAR and hotel values. The problem is the hotel forecasters look at the wrong indicators, and they are insulated from the things that really matter to correctly predict RevPAR and especially future values. They are doing it again as they are making projections disconnected from economic reality. They even are pointing to 1990-92 and 2001 as indicative of how to judge this recovery, and there is absolutely no such connection.

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Joel Ross

Joel Ross is principal of Citadel Realty Advisors, successor to Ross Properties, the investment banking and real estate financing firm he launched in 1981. A Wharton School graduate, Ross began his career on Wall Street as an investment banker in 1965. A pioneer in commercial mortgage-backed securities, Ross, along with Lexington Mortgage, and in conjunction with Nomura, effectively reopened Wall Street to the hotel industry.

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