Sandy crimps hotel revenue

Hotels in the areas hit by Superstorm Sandy this week may see revenue losses as the northeastern U.S. begins to recover from the devastating damage inflicted.

Keeping in mind the fourth quarter is typically New York City’s highest-occupancy and highest-rate period, it is expected that the calendar fourth quarter performance results will be off substantially.

Analysts project that the revenue impact will be comparable to that of the 9/11 terrorist attacks for hotels in the New York City region.

“The effect of the storm on the lodging industry will be unprecedented with the exception of September 2001,” said Dr. Bjorn Hanson, divisional dean and clinical professor at New York University’s Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management. “The extraordinary advance notice of the storm resulted in record lodging cancellations, and a reduced level of ‘stranded guests,’ which can be a source of lodging demand with other weather events.

Hanson noted that late October to early November is a peak time for meetings and conventions, which were cancelled in anticipation of the storm, and meeting planners have become more sophisticated than ever before in negotiating cancellation provisions that shift the burden of these types of cancellations to hotels.

A lodging analyst at FBR & Co., told Bloomberg that he has lowered his expectations for U.S. RevPAR growth in the fourth quarter from above 6% to 5.5%-5% due to the storm’s impact.

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