Although there's no doubt that the U.S. hotel industry was damaged by the terrorist attacks of 2001 and the economic crisis of 2008, the effects of those two events were not as extensive as some observers might think. A new study published by the Cornell Center for Hospitality Research analyzed the isolated effects of the 9/11 attacks and the economic crisis on hotel average daily rates, occupancy, and revenue per available room. As explained in the study, "The Impact of Terrorism and Economic Shocks on U.S. Hotels," by Cathy A. Enz, Renáta Kosová, and Mark Lomanno, when the effects of those two events were isolated from the other factors (affecting hotel performance at the same time), the recovery in hotel performance from the negative impact of the two events started relatively quickly.

The study examined data on 34,695 hotels provided by Smith Travel Research from 2000 through 2009. Without a doubt the terrorist attacks of September 11, 2001, quickly and severely damaged U.S. hotels' rate and occupancy, and the financial crisis of late 2008 had a similar but less pronounced effect on hotels' business. However, looking only at the effects of these events, the industry began to recover within a few months from both shocks.

"We've intentionally isolated the effects of these two shocks from factors like inflation, unemployment, and hotel seasonality to gain a sense of how the industry is specifically affected by unexpected events of this kind," said Enz, who is the Lewis G. Schaeneman, Jr. Professor of Innovation and Dynamic Management at the Cornell University School of Hotel Administration. "However, both the terrorist attacks and the economic crisis preceded economic recessions that continued to depress hotels' operations. In this study, we've controlled for hotel characteristic and other external events to focus directly on the impact of the two environmental shocks.

"Kosová is an assistant professor at the School of Hotel Administration, and Lomanno is president of STR. The full study is available at no charge from the Center for Hospitality Research at http://www.hotelschool.cornell.edu/research/chr/pubs/reports/2011.html.

Thanks to the support of the CHR partners listed below, all publications posted on the center's website are available free of charge, at .

About the Center for Hospitality Research

The purpose of the Center for Hospitality Research is to enable and conduct research of significance to the global hospitality and related service industries. CHR also works to improve the connections between academe and industry, continuing the School of Hotel Administration's long-standing tradition of service to the hospitality industry. Founded in 1992, CHR remains the industry's foremost creator and distributor of timely research, all of which is posted at no charge for all to use. In addition to its industry advisory board, CHR convenes several industry roundtables each year for the purpose of identifying new issues affecting the hospitality industry.

Center Members: Accenture • Access Point Financial, Inc. • Barclaycard US • Cvent • Davis & Gilbert LLP • Deloitte & Touche USA LLP • DerbySoft • Four Seasons Hotels and Resorts • Fox Rothschild LLP • Hilton Worldwide • Host Hotels & Resorts • Hyatt Hotels Corporation • IDeaS Revenue Solutions • InterContinental Hotels Group • Jumeirah Group • Marriott International • NTT DATA • Preferred Hotels & Resorts • priceline.com • PwC • The Rainmaker Group • RateGain • ReviewPro • Revinate • Sabre Hospitality Solutions • STR • Taj Hotels Resorts and Palaces • Tata Consultancy Services • Wipro EcoEnergy • Wyndham Hotel Group

Glenn Withiam
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CHR