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PricewaterhouseCoopers

Recent economic revival expands U.S. lodging demand and accelerates occupied room nights to a record level

According to PricewaterhouseCoopers research U.S. lodging industry demand will achieve a new record level in the…

According to PricewaterhouseCoopers research U.S. lodging industry demand will achieve a new record level in the fourth quarter of 2003 when average daily rooms sold will reach 2.723 million and will exceed the previous peak level of 2.697 million set in the fourth quarter of 2000.



PricewaterhouseCoopers forecasts lodging demand will increase 4.5 percent in 2004, while lodging industry supply will grow 1.4 percent. Although supply growth has slowed, it remains high compared with previous troughs. Lodging occupancy will advance by 0.9 percentage points to 61.2 percent. Although this represents a significant improvement from the trough of 59.1 percent in 2002, 61.2 percent remains low compared to historical values. As a result, average daily rates will only increase moderately at 1.9 percent, after declining a cumulative percentage of 2.5 percent since 2000.



The combined increases in ADR and occupancy will advance revenue per available room (RevPAR) by 5.2 percent in 2004.



The occupancy-driven recovery for the lodging industry in 2004 will set the stage for rate-driven RevPAR Growth in 2005, said Bjorn Hanson, Ph.D., global industry leader, PricewaterhouseCoopers. We anticipate a second year of occupancy gain in 2005 which will allow ADR growth to accelerate.



The 2003 U.S. Lodging Industry Briefing Report is now available



Every year PwC`s Hospitality & Leisure practice hosts a by invitation only industry breakfast briefing for lodging analysts and media. At our annual briefing, PwC unveils its industry forecasts, which have become the recognized industry forecasts. PwC also presents several special in-depth research analyses. Approximately 40 analysts representing every major Wall Street firm and approximately 50 media representatives from almost every major business and trade publication attend.



The U.S. Lodging Industry Briefing Report contains the same information that top equity analysts and journalists rely on to understand the current state and direction of the lodging industry. Topics covered in the report include:


  • An overview of the lodging industry in 2003, including a historical perspective and a comparison of the performance of the various chain scale segments.

  • An analysis of why the current lodging industry cycle is different from previous cycles, detailing differences in lodging supply growth and traveler concerns.

  • A section illustrating how both demand and rate have diverged from long-term trends since 2001. Rate and demand comparisons are made for the U.S. and for each of the five chain scale segments.


  • How changes in supply and demand since 2000 affect recent and potential lodging performance in 26 major markets.

  • An analysis of lodging delinquencies relative to historical levels and to other commercial loans.

  • The relative contributions of group and convention business and business demand to industry demand and rate

  • The outlook for occupancy, average daily rate, revenue per available room, supply, and demand for the U.S. lodging industry in 2004 and 2005, with occupancy and revenue per available room detail for the chain scale segments.

  • A special analysis of the effect of the Internet on lodging pricing, including quantification of both the positive and the negative effect of the Internet on the industry and an analysis of how chain-affiliated and independent properties have been affected.

Theodore Koumelis
Co-Founder & Managing Director - Travel Media Applications | Website

Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.

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