The hospitality sector was hit hard by the economic downturn. In tough times, belts tighten, and the first thing on most families’ chopping block is anything that requires disposable income. An upturn in this sector could be a sign that the economy is turning around.
"The conventional wisdom suggests that key fundamentals should be on the wane, but that has not happened yet and, due to many factors, we don't believe it will occur in 2012," said Michael Fishbin, leader of Ernst & Young's global hospitality services. He attributes this to the rate of new U.S. hotel construction, which has been less than half of its historical average in recent years.
“Hotel supply is not going to outpace demand any time soon, giving fundamentals such as room rates and overall occupancy a chance to further recover," he said.