InterContinental Hotels Group CEO Andrew Cosslett told the few thousand hospitality investors and analysts in attendance that he expects the industry to be strong through the next decade at least, as new factors in travel have disrupted the usual up-and-down motion of the industry's cycle. These generational shifts, as he called them, give the hotel industry a chance to prolong its potency, he said. "Every cycle has an end, but we're in a different place, and there's definitely some things happening in the world," Cosslett said. "We didn't have the Internet, we didn't have 100 million Chinese people about to arrive on the world travel scene and we didn't have people with 10 years more life expectancy and more money."

Decreased demand affected hotel performance earlier this year. Marriott International, for example, slightly lowered its 2007 revenue projections after its first-quarter revenue per available room in North America increased by a little less than its earlier growth projections (BTN, May 7). Much of that impact was blamed on the increased demand and decreased supply in the early months of 2006 following Hurricane Katrina. Mark Lomanno, president of Smith Travel Research, said that most industry indicators pointed to that turning around throughout the rest of the year, however.

"Demand had been negative for a period of time, but that is beginning to change and will get much better as the year progresses," according to Lomanno. "Everyone should have been more concerned six months ago than they were about the force of the industry and less than they are now."

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