After suffering through a year that PhoCusWright analyst Jake Fuller called “one of the worst years for the hotel industry since World War II,” the global hospitality industry is searching for a 2010 outlook and looking for signs of hope in the numbers.

The data, however do not paint the pretty picture that most were hoping for. Forecasts have been cautiously described as ‘less bad,’ but effectively represent a continued slide for the industry. Smith Travel Research (STR), a leading provider of statistics and data for the hotel industry, projects 2010 occupancy to be flat at 55.1 percent, average daily rate (ADR) to decrease 3.2 percent, and revenue per available room (RevPAR) to drop an additional 3.2 percent.

On the bright side (if you can call it that) STR expects stabilization in the second half of the year and they project annual demand growth of 1.8 percent… which will just serve to offset supply growth of the same figure. PhoCusWright’s U.S. Online Travel Overview Ninth Edition: Hotels & Lodging forecasts modest 4% growth of online hotel transactions in 2010. “Pricing power is currently in the hands of the OTAs and will not return to the hotels themselves until 2012,” says Fuller who heads PhoCusWright’s Financial Edition.

A better way to take the pulse of the industry is to go directly to the source – the industry insiders and executives that this week converged at ALIS, the most important U.S. hotel industry conference. It’s there that deals are created, or not.

Industry veteran and consultant Chuck Tomb, president of Integrity Hospitality Advisors suggests the mood at the conference was slightly better now that 2009 is over. “They just can’t believe that 2010 could possibly be as bad as 2009,” says Tomb.

On the real estate and development front where much of the hotel industry makes its money, Mr. Tomb says, “Everyone has capital but no one can find deals to get money deployed. The feeling is that deals will have to begin coming forward as the banks and institutions are starting to feel significant pressure to unload debt that isn’t performing.” As loan defaults rise, banks (rather reluctantly) are being put in a position of power, but aren’t playing ball. “The issue is that there is still no well-priced debt to execute, so deals will need to be done with all equity,” says Tomb.

In 2010, the hotel industry will be in such disarray that your outlook may just depend on what type of investor you are. The numbers suggest the hotel industry isn’t recovering any time soon. However, the most tenacious, innovative and cash-flush will find great opportunities in 2010. In fact, the lawyers and distressed real estate experts are looking forward to a banner year.

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