A Hotel Forecasting Tool for the Current Downturn

HVS, with 11 domestic offices and 14 worldwide, has a massive database of historical operating data. As we entered the current downturn, it occurred to them to look at the actual data for hotels that experienced major rooms revenue losses from 2000 to 2002.

They did so in order to see what we could learn about the other categories. What they came away with is a new forecasting tool that can help analysts build a forecast or confirm that an existing forecast reflects typical industry standards for a declining economy.

The variability indexes developed offer lenders, asset managers, hotel operators, and other analysts a market-derived historical context for the current downturn. Segregated among 13 categories of hotel, the indexes allow an analyst with a given rate of rooms revenue loss to either build a ground-up forecast, or place an existing forecast within a historical context. The following reference grids can be used to quickly identify itemized changes based on rooms revenue losses ranging from 5% to 30%, at fivepoint intervals.

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Source: http://www.hospitalitynet.org/news/154000320/4040123.html