Monday, January 26, 2009

Hotel Vacancies at 20 Year High

The WSJ reports today, "The downturn in the U.S. hotel industry is becoming so acute that it has thrust the sector into crisis, leaving vacancies at a 20 year high and putting many properties in danger of missing payments to lenders".

With the Civic Center preparing for a 25% decrease in business this year and two local hotels up for sale (they were a while back and I haven't heard they have been taken off the market) and the city putting the taxpayer on the potential hook for $40million dollars in General Obligation Bonds to support a renovation and addition of a hundred beds downtown in the Pere Marquette location, this report does not paint a pretty picture for Peoria.

"Among commercial real-estate categories, the hotel industry rises and falls the most dramatically in reaction to economic cycles. That's because, unlike office buildings and shopping malls with long term leases, hotel occupancy and rates change on a nightly basis as customers come and go at will."


Anonymous said...

....Meanwhile we will continue to look across the river and watch East Peoria adding hotels right along I-74....

The Fairfield will be opening soon. The Embassy Suites seems to be doing well. Rumors had it EP was going to build another.

How is it that the Hotel business seems just fine two miles away?

PEORIA said...

It won't be for long, " Anonymous " ! East Peoria's hotels aren't immune to the recession and will experience the downturn JUST LIKE EVERYONE ELSE. Why? Because they cater to the same clientele. Now, don't cry! Because the recession affecting the hospitality industry, now, won't be effecting the industry when the (new) Peoria Marriott's completed.

Oh! And, by the way, Peoria's (new) Marriott will STILL be built despite your disapproval!

Karrie E. Alms said...

Peoria: Still doesn't change the facts that taxpayers will likely be stuck with the hotel bill and it will be another project that does not meet projections. Check back in five or ten years than check the pudding to see if Merle is correct.

Anonymous said...

Isn't enough that all of in Illinois will be paying off the huge state debt we now already have. Hey what's a bigger bill for Peoria, they can just put the additional spending on their credit cards that seems to be working for everyone else. Keep telling the story Dad!