Highlights include Marriott International, Inc. (MAR), Starwood Hotels & Resorts Worldwide, Inc. (HOT) and Intercontinental Hotels Group Plc (IHG).

The hotel industry continues to be hit hard by the recession, as both business and leisure travelers cut back on expenditures.

Smith Travel Research, Inc. released weekly hotel operating statistics today, and the weak year-over-year results continue. For the week ended April 4, occupancy fell 9.9% year-over-year to 56.2%, average daily room rate, or ADR, fell 9.0% to $98.79, and revenue per available room, or RevPAR, fell 18.0% to $55.49.

Large metro areas were hit especially hard last week, with Chicago and New York City leading the ADR decliners by falling 24.0% and 24.9%, respectively. Chicago had the largest occupancy decline in the top 25 markets, and led the way in the RevPAR category as well, with a year-over-year decline of 40.7%.

Among the top 25 markets, only Detroit, Michigan posted increases in both ADR, up 12.0%, and RevPAR, up 8.3, during the week. As we highlighted in a previous post, the city benefited from the run-up to the Final Four, which was held in Detroit over the weekend. Even so, the city still posted a year-over-year decline in occupancy during the period. We expect that the city will post even better operating numbers this week.

Our close watch on room rates continues, and the fact that the industry has avoided double-digit percentage declines in ADR in every week but one in 2009 is a somewhat encouraging sign. However, the general trend has been towards increased deterioration in rates, and we await the strategies that hotel owners and operators will undertake as the weather begins to warm up.

If the large hotel companies, including Marriott International (MAR), Starwood Hotels & Resorts Worldwide (HOT) and Intercontinental Hotels Group (IHG), can reasonably maintain room rates until demand begins to pick up, the industry will likely emerge from this down cycle substantially quicker than if companies begin sacrificing room rates in an attempt to boost occupancy.

With no clear sign on the horizon that operating fundamentals will improve in the near future, we maintain our negative outlook for the sector.

Read the full analyst report on “MAR”
Read the full analyst report on “HOT”
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