文章基本信息

标题：Multiple cycles
作者：Ross Woods
期刊名称：Hotel & Motel Management
出版年度：2005
卷号：March 21, 2005
出版社：Questex Media Group

Multiple cycles

Ross Woods

I couldn't help but respond to your recent invitation to comment on how long the present upturn in the lodging industry is going to last. Over the past couple of years, I have undertaken detailed research on hotel market cycles throughout the United States and more recently in Canada. Note that I didn't use "the" hotel market cycle because this can be very misleading. Most commentators thought the industry peaked in 2000. This was the case if we only examined national data, but an analysis of over 50 major hotel markets in the United States reveals that about 27 percent peaked in 2000. About 53 percent had already peaked during the 1995-1999 period. In fact, almost as many markets peaked in 1998 as they did in 2000.

My research concludes that the average duration of the upswing (trough to peak) for full-service hotel markets is 6.6 years with a standard deviation of plus or minus 1.7 years. In other words, there is a 68-percent likelihood that the average upswing will last between 4.9 years and 8.3 years. The average downswing is 4.6 years plus or minus 1.9 years. The duration of the average cycle (peak to peak or trough to trough) is 11.5 years plus or minus 2.1 years.

With 43 percent of markets in the trough stage and 41 percent of markets in the recovery stage of their cycle in 2003, I forecast that the majority of markets will reach their peak between 2007 and 2011.

Rarely are market participants able to forecast the exact turning points in the cycle, but they now have the wherewithal to play the probability game with greater confidence. Investors can now gauge the probability of a market falling below its previous cyclical lows or cyclical highs.

While cycles are not expected to repeat themselves in exactly the same way as they did before, they nevertheless provide astute investors and operators with significant insight and timing for investment and operating decisions.

I trust this throws some light on the current upturn.

Ross Woods

Principal

Hotel Investment Management LLC

Maplewood, N.J.

Via e-mail

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