Don't Get Too Excited About Good News

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Both the consumer press and the hotel press have reported unusually good news in recent weeks. At the end of last week, the big national story was the jump in new jobs (162,000) added to the economy in March. And while there is debate on the composition and value of those jobs, it should be clear to all that adding jobs is better for the economy than losing them. The result has been cautious buoyancy in consumer sentiment. People feel better when the news is hopeful, often leading to more spending, which leads to more jobs, etc.

Similarly, recent news releases from Smith Travel Research have given hoteliers a spring in their steps that no one has seen since 2008. Last Thursday, STR reported hopeful upswings in both occupancy (up six percent) and RevPAR (up 4.2 percent) for the previous week. Even average rate, which nosedived in late 2008 and hasn't recovered much since, was only down 1.6 percent last week. You can't deny things are looking up for the hotel industry.

And the forecasts from STR, PKF and others point to even stronger gains by the end of the year and into next. PKF sounded the most optimistic note, forecasting RevPARs will soar by double-digit percentages once we make it to 2012.

Yet, we need to rein-in our enthusiasm a tad. Yes, business (and the economy) are getting better, but only slowly and not evenly across all segments, markets and locales. And there's no guarantee some event or trend could trigger another downturn in the economy (the dreaded double dip) that would likewise mar the lodging industry's march toward recovery.

It's prudent to rejoice at improvements in business, locally, nationally and globally, but don't get carried away thinking good times are once again right around the corner. I suspect we'll see a lot more pain before life returns to what we remember as normal, if that ever happens at all.

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