The numbers were down, but the mood was up at STR’s inaugural Hotel Data Conference last week in Nashville, TN. STR President Mark Lomanno started his opening presentation with “I wish I had some good news.” What followed was the bad news.

The U.S. hotel industry is about a year into what STR projects to be its longest and deepest decline. The latest projections have occupancy falling 8.4 percent this year to 55.4 percent, ADR dropping 9.7 percent to $96.43 and RevPAR plummeting 17.1 percent to $53.40. Occupancy has fallen seven straight quarters and STR projects that to continue another four. RevPAR will decline another five quarters for a total of nine in a row, well past the length of the last two downturns (1990-91 and 2001-02).

As dire as it sounded, the consensus from STR and the audience of approximately 200 attendees was the industry had finally hit bottom. The good news, or “less worse news,” as Lomanno dubbed it, was the rate of declines are slowing across the board and some marginal gains could be seen by the end of 2010.

Lomanno called the industry “underdemolished,” noting supply growth is stuck at 3.2 percent, helping drain occupancy and ultimately rate. Fewer hotels are opening, obviously, but surprisingly, fewer are also closing. Only 50 independent hotels are expected to close this year, vs. 137 last year and 258 in 2007. Those numbers are what have caused STR’s updated projections because “not as many rooms are closing as historical models showed,” said Lomanno, who explained it’s because closings are usually the result of real estate decisions, but without capital and better alternatives, hotels are staying open.

Lessened demand with continued supply gains has added up to the deep declines in rate as many chains and properties have turned to discounting. “Sometimes we’re at the mercy of our dumbest competitor on the street corner,” said Jonathan Bogatay, president and COO of The North Central Group, during a breakout session on revenue management.

PKF and PricewaterhouseCoopers, who took part in the final session of the conference, were in sync with STR’s forecast. PKF called for an 18.5 percent drop in RevPAR this year followed by a 2.7-percent decline in 2010, while PwC had RevPAR falling 15.7 percent this year and gaining 1.6 next year, although Scott Berman said his firm would be releasing new projections next month. He said he was most troubled by the decline in group travel, which accounted for 70 percent of the 11-percent decline in occupancy.

Eighty-eight attendees, of approximately 200 at the event, responded to a survey on the industry’s recovery time. The majority felt RevPAR would start to recover in the second half of 2010. Predictions for rate recovery were less optimistic as 50.6 percent said it would take three to five years to reach January 2008 levels again and 24.1 percent said it would take six to eight years.