Katrina to Give U.S. Hotel Franchises a Boost

Well, this is a surprise after all the horror stories of Hurricane Katrina wreaking havoc on the economy. Smith Travel Research firm announced that occupancies in hotels for the rest of the country that were not closed due to the hurricane will be substantially above average for the year. It increased its 2005 growth in revenue for the U.S. hotel industry.

The research firm has upgraded its industry revenue projections because of a decrease in hotel room supply in Louisianna and Mississippi coastal regions, coupled with a continued robust demand for hotel rooms. Even in the hurricane hit areas, there will be an increase in room demand from emergency workers for what is available. This room shortage caused by emergency workers flooding Katrina hit areas is a phenomenon that news agencies have already begun to report. The research firm upgraded its projection in 2005 of growth in revenue per available room (revpar) to 8.2 percent from its previous forecast of 7.6 percent.

Source: Reuters / Yahoo! Finance