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Monday, November 23, 2009

Forecasts: Unhappy Holidays for Restaurants and Hotels

by Calculated Risk on 11/23/2009 10:23:00 PM

Update on the Chicago Fed Index post: According to the Chicago Fed, the "CFNAI-MA3 moves significantly into positive territory a few months after the official NBER date of the trough". Earlier I was excerpting from the entering recession section. This suggests - using this index - it is still too early to call the end of the recession.

From Jerry Hirsch at the LA Times: Restaurants brace for dreary season as consumers lose appetite for dining out

The number of people visiting restaurants has plunged for four consecutive quarters, according to NPD Group, a market research firm. ... chains such as McCormick & Schmick's, the seafood house, and Morton's, the steak purveyor, saw same-store sales, or sales at restaurants open at least a year, fall 18.8% and 16.8%, respectively ... according to Bellwether Food Group, a food industry consulting firm.

Bellwether doesn't project an industry rebound to pre-recession levels until 2012.
Research firm NPD doesn't expect an industry turnaround any time soon. ... In 33 years of tracking restaurant traffic, NPD "has never seen this type of a weakness for this long of a period," [Bonnie Riggs, a restaurant industry analyst with NPD in Chicago] said ...
And from Joe Sharkey at the NY Times: For the Hotel Industry, Recovery is a Long Way Off
Bjorn Hanson, a clinical associate professor at the Tisch Center, said that average domestic hotel occupancy this year would be about 55 percent.

Average national occupancy has dipped below 60 percent only twice before since the 1920s, he said, during the Great Depression, and in the aftermath of the 2001 terrorist attacks.
The occupancy dip following the 9/11 attacks was barely below 60%, so, according to Hanson's comments, the current hotel recession is the worst since the Great Depression.