Question-and-Answer Session
Operator
Your first question comes from David Katz - CIBC World Markets
David Katz - CIBC World Markets
I wanted to sort of address the guidance issue just a little bit and if we could talk about your degree of confidence not that we profess to know what the depth of the recession will be, but what is your degree of confidence that we won’t have to come back and perhaps trim the guidance some more. How do we, help us pencil out particularly that other RevPAR aspect of your business that I think David mentioned is potentially an exposure. How deep a recession have you factored in to this new guidance that you have?
Colin Reed
Good morning David, what we have done is we’ve looked back to what happened to the group business in period like 2002, the year right after 911 when people, an event unprecedented in the history of this country okay, and we looked at the group behavior in that business and frankly to remind you and everyone else on the phone, in 2002 our Opryland Hotel had positive RevPAR growth of 4% over the previous year. Whereas the industry was off 2% - 3% right across the board. So we’ve looked at the group behavior historically to the last cataclysmic event and we’re pretty confident the groups are going to turn up and obviously as we pointed out and we point this out every quarter, I know it’s a pain in the neck, but we have contracts for almost 60 points of occupancy we have on the books this year. So that’s the first thing.
The second thing is we look at the current trends around transient, we look at the current trends around leisure, we look at what happened in 2002 to the Opryland Hotel and that’s how we built our model and look there’s one other thing that’s going on here. We keep talking about recession and we keep talking about transient business could fall off a cliff, but unlike 2002 the US dollar wasn’t trading at a low point against every single European currency and the reason why I think the big hospitality companies that happen to be positioned in gateway cities like New York are doing well is because tourism is flooding into this country. And we happen to have a hotel in Orlando, we’re opening a hotel in the nation’s capital in Washington and that gives us some degree of comfort. If we thought for a moment that there was risk in our guidance, real risk in our guidance, we would have trimmed it further but what we have been pointing out over the last five years, six years as we’ve been painfully going through this quarter by quarter conference call with all the analysts and the investors is that our business model is a little different to the rest of the industry in the sense that we have so much of our business contracted for and that’s what gives us confidence. David have you anything to add to that?
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