Given the fallout from Sept. 11, investors were unsurprised whenthe Spokane-headquartered hotel company attributed the decline"primarily to a decrease in hotel revenue of 11.6%." In its Nov. 14announcement, WestCoast said, "the terrorist attacks had an impacton the ability and motivation of our customers to travel andutilize our hotels and restaurants." And it is clear the companyexpects impacts may continue.

|

In big, bold letters, a heading in the announcement read, "Wemay face interruption of production and services due to increasedsecurity measures in response to terrorism." WestCoast furtherstated that delays in services such as transportation, mail orfinancial "could have a material adverse effect on our business,results of operations and financial conditions."

|

Looking forward, Chris Burdett, a hotel specialist with theSeattle office of Colliers International, tells GlobeSt.com heexpects financial reports from hoteliers to be dreary for a while,but he believes an end to the gray skies lies in the foreseeablefuture. Just as experts are predicting a relatively short-livedrecession for the overall economy, Burdett sees something similarfor the hotel sector. "It's just going to take some time," hesays.

|

He is, however, quick to include the caveat that any recovery isdependent on the economy continuing to head down the road on whichit seems tracked. There are many unknowns still lurking in thebushes - like the potential for negative incidents arising from thewar.

|

"Overall, everybody's going to have a difficult fourth quarter,"says Burdett, noting that winter is typically slow for theindustry. "But sometime in the first quarter or early secondquarter we may begin to see some recovery," he counters.

|

In the Washington hotel economy, Burdett is already seeing someareas beginning to bounce back to what would be considered normalpre-9/11 levels for this time of year. Recovering most quickly arethe secondary and tertiary markets. "Airport and larger groupfacilities, such as in downtown Portland and Seattle," saysBurdett, "are still struggling to some degree."

|

It may also be a while before hotel investors to get back intothe swing of things. "There is still a lot of concern in themarket," Burdett explains. "It's the wait-and-see mentality. Thereare buyers out there, but they are concerned about the economy andthe war. There's a lot of trepidation about getting into themarket."

|

The good news according to Burdett is, "We aren't seeing lendersor owners panicking. Everyone knows this is a cyclical industry,and this is nothing new in terms of an economic turndown."

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.