The lodging industry has taken it on the chin in the past year. RevPAR declines of nearly 20 percent nationally have been sustained so far through 2009; yet, as with the passing night, it’s always darkest before the dawn. In spite of the dismal market metrics experienced so far in 2009, I believe we’re at the bottom of the market cycle.

Unless one believes corporate travel will forever be banned, families won’t vacation and groups won’t congregate in the future (in which case America is doomed anyway), it’s certainly not a stretch to assert that market conditions can only get better. Still, many in the market are behaving as if there will never be a turnaround. This is good news for astute buyers who can purchase hotel assets at the best prices since the RTC days.

The smartest buyers have always been contrarians. It takes no special skill or insight to buy when everyone says hotels are a good investment (at the market peak). However taking calculated risk has always been rewarded by the upcycle values. It may not be a popular sentiment, but the market always has and always will behave in cycles. This is particularly true in the lodging industry, and I'm calling the bottom on this cycle.

I make this bold statement for both anecdotal and empirical reasons:

• America is huge, and our national commerce demands travel. Our national infrastructure was set up to accommodate travel.

• Americans love freedom, and travel is an expression of that freedom. We enjoy our family vacations, group events and even corporate trips.

• America sells, and a face-to-face relationship sells better than electronic or telephone communications.

• It’s true that transportation is more costly and more inconvenient, which affects non-essential trips. However, travel is inherent in our system of commerce and our leisure activities. From Maine to Malibu, and Mackinaw to Marathon Key, Americans love their freedom. Our homogeneity makes all of our country accessible to all of our residents. Recent economic indicators support that the economy is turning. Of course, corporate travel won’t likely resume until corporate productivity improves, suggesting that the hotel market is a lagging indicator.

• On May 26, The Conference Board said the leading economic index rose one percent in April, following declines of 0.2 percent in March and 0.5 percent in February.

• By late May, The Conference Board's Consumer confidence index had increased to its highest level in eight months.

• "The outlook for employment is much less negative than in prior months, but still it’s not likely that employment growth will resume before the final quarter of the year," said Gad Levanon, senior economist at The Conference Board. "In April, the Employment Trends Index recorded its smallest decline since June 2008, and three of its eight components actually showed improvement."

• The National Association of Realtors said existing home sales increased 2.9 percent in April. Lawrence Yun, NAR's chief economist, attributes activity to the first-time homebuyers credit. He further projects sales volumes will increase by 10-20 percent in the latter half of 2009 compared with the latter half of 2008.

Of course, there is risk in buying at the bottom: Will prices continue to fall in the short run? Will there be another economic, political or international event that further deters a turnaround? Use your head, and analyze your market dynamics. Remember the adage "all real estate is local". Don't let negative prognostication keep you from buying at the bottom and enjoying the value increases created by the cycle shift.

Eric Belfrage is a member of the CB Richard Ellis Hotels group and involved nationally marketing lodging assets. Prior to brokerage, Belfrage conducted feasibility and appraisal work on hotels, and is a member of the International Society of Hospitality Consultants, the Counselors of Real Estate and The Appraisal Institute. He can be reached at eric.belfrage@cbre.com to discuss his views of the hotel markets and specific sub-market dynamics.