Conference Chairman Jim Burba wondered whether it’s going to feel like heaven in 2011.

It may not be, as ALIS organizer Jim Burba suggests, “finally heaven in 2011,” but the lodging industry’s operational performance and financial health are finally back on track. That was the consensus of a panel of economists and industry analysts at yesterday morning’s opening session of the 10^th annual Americas Lodging Investment Summit in sunny San Diego.

The panelists moved from the macro level of U.S. and world economies to a specific review and forecast for the U.S. lodging industry. All the speakers were bullish, but each tempered their optimism by pointing out factors that could inhibit a swift and unfettered upturn.

First the good news: Both Jan Freitag of STR and Mark Woodworth of Colliers PKF Hospitality Research see significant improvements in industry fundamentals this year. Freitag, an STR vice president, says a muted increase in new supply (less than one percent), combined with a fairly healthy rise in demand (up 2.5 percent), will generate significant hotel pricing power and a 6.1-percent jump in RevPAR. Colliers PKF President Woodworth was even more aggressive in his forecast, calling for a 5.3-percent increase in demand, a 4.6-percent rise in rates and a 9.0-percent boost in RevPAR. His summary of 2011: “Things seem to be getting better quicker.”

While the signs are positive, Freitag reminded the audience how far the industry has to improve from the devastating downturn, which included a nearly 17-percent collapse in RevPAR in 2009. Using the top 25 hotel markets as example, he showed most properties are still far away from their peak performances achieved in the mid-2000s. All but three (New York, Boston and Washington, DC) of the top markets are still selling fewer roomnights today than they did in the prior period of peak demand. And all 25 markets are still “way below” their peaks in rate, with most markets $10 to $20 off peak ADRs.

“The industry’s top five markets—Boston, New York, Miami, Los Angeles and San Francisco—will drive the industry’s recovery, but they were also the ones hardest hit in the downturn,” he said. Likewise, the hard-hit upper segments of the market are coming back the quickest.

And as Woodworth pointed out, it won’t be until 2013 or 2014 that levels of occupancy and RevPAR reach their long-term averages.

Gary Fritz, president of Expedia’s Partner Services Group, had a different spin on the state of hotel performance. Using rate data from Expedia’s online travel agencies, he showed ADRs for leisure business is recovering faster than for business travel, and that’s having an effect on leisure travel patterns. In San Francisco, for example, rates paid by leisure customers have risen 12 percent, while business travelers are paying about eight percent less.

“The data shows how leisure travelers are reacting to the higher rates they’re paying,” he said. “Looking at the top 25 markets, the length of stay for leisure business is down about two percent, and there’s also evidence of trading down in star levels. Leisure customers are shopping rates more and booking later, and they’re willing to stay further from center cities in order to find better deals.”

Scotia Bank Chief Economist Warren Jestin provided a global economic perspective to the factors having an impact on the hotel industry. From his viewpoint, the economy “is definitely on the road to recovery, but that road won’t take us back to where we were before.”

He contrasted the economic fortunes of North America and the EuroZone with the advances in the developing world, specifically China, India and Brazil. The Chinese economy is growing at about nine percent, India eight percent and Brazil around five percent (compared to 2-2.5 percent in North America). Several statistics were particularly eye opening.

According to Jestin, more cars were produced and sold in China last year than in all of North America, and last year China became the third largest country in terms of tourism spending. This new world economic order is a fact all businesses and industries, including the U.S. hotel sector, must face and react to appropriately.

“If you only focus on the familiar and the way things worked before the recession, you may be following a losing strategy,” he said.