Although an economic recession and hotel industry downturn are far from certain, economic indicators, investor and corporate sentiment, as well as the recent operating performance of hotels in various sectors, point to an impending slowdown.

The current cycle, according to data intelligence firm STR, has continued virtually unabated since March 2010 with year-on-year RevPAR increases occurring in 112 of these 115 months. However, September 2019 was the second month this year when RevPAR results turned negative in the US, as increased supply outpaced demand. Similarly, PWC reports deceleration in the USA, with, for example, Q3 RevPAR growth at less 1%, the lowest figure since the industry began to recover from the 2008 economic crisis.

Some investment analysts suggest that hotel companies may not be adequately prepared for the eventual downturn. Investors and the hotel owners who increasingly rely on firms to operate their hotels may be right to be concerned about what such companies learned from the banking crisis of 2008.

The question, therefore, is how have the strategies of hotel companies changed or evolved over the past decade to help firms survive or even prosper during the next downcycle that may soon be upon us?

IDeaS - A SAS Company

This viewpoint is co-created with IDeaS a SAS company
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Ash Kapur
Ash Kapur
CEO, InTown Suites and Uptown Suites

Our extended-stay model is far more hedged to a downturn when compared to a traditional transient/group hotel. Even if the economy slows down, our focus remains on a targeted capital improvements program that will continue to fuel our growth in the coming years. Key is to have a plan in place, which we do.

Heather McCrory
Heather McCrory
CEO of North & Central America at Accor
Jay Stein
Jay Stein
Chief Executive Officer at Dream Hotel Group
Michael Levie
Michael Levie
Co-Founder at KUBE Ventures
Ramón Aragonés
Ramón Aragonés
Chief Executive Officer at NH Hotel Group
Bill  Walshe
Bill Walshe
CEO at Viceroy Hotel Group
David  Etmenan
David Etmenan
Chief Executive Officer & Owner at NOVUM Hospitality
Ritesh Agarwal
Ritesh Agarwal
Founder & CEO-OYO Hotels & Homes
Sem Schuurkes
Sem Schuurkes
Founder and Partner of CityHub
Marloes Knippenberg
Marloes Knippenberg
CEO of Kerten Hospitality