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NEW YORK CITY-With the exception of New York City’s downtown office sector, no segment of the real estate industry was harder hit by the Sept. 11 terrorist attacks than lodging. Both literally and figuratively, the attacks grounded the nation’s airline industry and shuttered hotel rooms worldwide, and notwithstanding deals already in the pipeline, the quiet caused by the global wait-and-see attitude was–and still is–deafening.

Given the magnitude of the lodging downturn–which was already in the works, thanks to a softening economy–the possibility of a midyear 2002 recovery is very good news. And that’s exactly what respondents to our latest Quick Survey are telling GlobeSt.com.

Most participants (21%) predict that RevPAR for upscale, full-service hotels will bottom out by Q2 of next year, while slightly less (20%) say the sector has already hit bottom. Q3 of next year is cited as the turnaround quarter by 17% of the participants while Q1 is the target bounce for 16%. Some 15% think that the recovery will start no sooner than 2003, while 11% are waiting for next year’s fourth quarter.

That’s full service. In the limited-service sector, RevPAR has already bottomed out, say 25% of our participants. Slightly fewer survey takers (22%) say a comeback will take a little longer–until Q1 of next year, and 21% say Q2 is the magic number. The next largest group (13%) thinks we’ll have to wait until 2003 before we bottom out, while the third and fourth quarters of next year get the fewest votes (12% and 7%, respectively).

When the recovery comes, where will investment criteria such as cap rates, rates of return and equity yields normalize first? First-tier coastal cities in the US will offer the best investment bets first, according to nearly half (48%) of our respondents. Some 29% place their bets on traditional convention-center destinations, such as New Orleans or Las Vegas, while 17% says that European destinations will recover before the states. Only 6% see the recovery sweeping through Asia first.

Who will be first to buy? The top three players will be private equity groups (44%); domestic private investors (18%); and equity joint ventures (14%). Garnering much smaller numbers were foreign private investors (9%); pension funds (8%); public companies (6%); and private-placement securities (1%).

Regardless of where or when the recovery takes shape, it should come as no surprise that the hotel companies boasting diversified holdings will weather the storm better, says 88% of the survey’s respondents. Some 12% feel otherwise.

It should be noted that, while the survey pulled a cross-section of respondents, 40% of participants do most of their business in the Northeast. The West Coast came in a distant second with 18% of our respondents focusing their work there. The Southeast is the stomping ground for 17%, with the Midwest (10%); Southwest (9%); and Europe and Asia (3% each) bringing up the rear.

In the comments portion of this week’s survey, we asked participants if corporate America–by curtailing travel–is failing to do its part to support President George Bush’s Business-As-Usual mandate, and the majority of writers–59%–support corporate America’s post-attack curtailment of travel plans. Here is a sampling of comments from both sides of the issue:

“Yes, I think there are a number of companies that are fearful regarding travel. Also, there are a number of companies that are using a crisis as an excuse for poor performance.”

“It seems so. Business has to get back to doing business, but lots of companies are waiting in the wings, delaying decisions, putting work on hold, playing wait-and-see.”

“No. Corporate America is exercising a reasonable level of prudence to get a better handle on where the economy is heading.”

“It is not corporate America’s job to gratuitously send people traveling around to prop up the travel industry. I believe that corporate America will discover more efficient ways to do business and that there will be a permanent reduction in travel.”

“Bush’s business-as-usual mandate is not congruent with reality. These are unique times, even more troublesome than the ’60′s, which had Cold War, assassinations, Vietnam, race riots.”

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