2009 was the worst year in the modern history of the hotel industry. Nearly every one involved in the lodging business—owners, developers, operators, marketers, vendors, employees—will be glad to see the dawn of 2010. Over the past two days, we’ve presented the top 10 hotel stories that defined the year. Here are the top five news events of 2009:

5. Extended Stay America's Bankruptcy. While some observers thought a number of hotel chains would face serious financial problems, just one major brand—Extended Stay America—was forced into bankruptcy this year. The South Carolina-based chain of 660-plus properties under several brand names filed for protection in June, claiming $7.1 billion in assets and $7.6 billion in debt. The Lightstone Group, a hedge fund, bought the company in 2007 for $8 billion, most of which was financed. Shortly after the filing, news reports claimed an appraisal of the chain put its value at nearly $3 billion. At the end of the year, no disposition has been scheduled.

The St. Regis Monarch Beach in Dana Point, CA is where AIG spent $443,000 and created an effect still being felt.

4. The AIG Effect. It’s nearly impossible to measure the damage to the hotel industry due to what is widely known as the AIG Effect. Coined in late 2008, the term has come to reflect the general shift away from spending on luxury items—especially travel—by consumers and especially corporations. It began as a backlash to American International Group’s scheduling of a $443,000 incentive trip for top performers just after the firm got a $90-billion government bailout. Politicians soon jumped on the concept by proclaiming luxury travel for any reason was un-American during recessionary times. Tourism industry lobbyists were able to persuade the pols to dial down their anti-travel rhetoric, but by then it was too late. As a result, luxury hotels have generally suffered the worst among all segments of the hotel industry.

3. Starwood, Hilton Battle Over Denizen. The story was almost unbelievable in its absurdity: A pair of executives allegedly left one company (Starwood) with the electronic equivalent of truckloads of information related to Starwood’s W brand to help their new employer (Hilton) develop a similar and competing brand, Denizen. Not surprisingly, Starwood sued Hilton. Also not surprisingly, Hilton says it was appalled such a thing could happen but relieved the executives of their duties and halted development of Denizen. As the year came to a close, rumors swirled that the two firms are near a settlement that would bring the DenizenGate scandal to a close.

2. The Credit Crunch. For more than a year, hotel developers, owners and potential owners have faced a credit crunch that’s unprecedented in the history of commercial real estate. The result has been a severe shortage of debt and equity financing for most any kind of hotel deals. Hotel transaction volume plummeted from $8.4 billion in 2008 to $1.6 billion through November of this year. New construction has been severely curtailed, too. According to Smith Travel Research, the number of hotel rooms under construction fell by 41 percent from October 2008 to the same month this year. The few deals getting done involve well-capitalized borrowers who have solid track records and long-standing relationships with local or regional lenders. Even those deals are few and far between.

1. A Year To Forget. No matter how you slice it, 2009 is the worst year ever for the hotel industry. According to PKF Hospitality Research, every major industry operating metric was down significantly in 2009: occupancy (-8.9%), ADR (-8.8%), RevPAR (-16.9%) and demand (-6.1%). To exacerbate the crisis, supply rose 3.1 percent this year. Things will improve in 2010, but all data points except demand will still post declines. The persistency of the downturn has led to billions of dollars of delinquencies, defaults and foreclosures, with even more likely for 2010.