US HOTEL REVPAR “LINKED” TO THE DOLLAR

A weak dollar and strong worldwide economies have masked what would otherwise be a pretty bleak RevPAR picture in the US. All year, US “international” cities have outperformed the rest of the country in terms of RevPAR growth. The following chart highlights the positive correlation between growth in international visitation and RevPAR by city. A weak dollar combined with solid economic growth overseas was a big contributor to RevPAR growth. Despite strong international visitation during the first half of 2008, the rate of change in RevPAR growth slowed from 2007. The weak link: domestic business and leisure travel. While domestic travel remains sluggish in the back half of 2008, the other 2 trends have reversed. The dollar has strengthened and overseas economic growth is slowing. Looks like one weak link has turned into three.

Weak $ contributed to international & RevPAR growth. What happens now that $ is strenghening?