Press Release: PricewaterhouseCoopers
January 14, 2002
NEW YORK, NY -- On Christmas Eve and Christmas Day, the downward pressure on lodging occupancy levels reflected
a decline compared with 2000. Based on PricewaterhouseCoopers' analysis of Smith Travel Research data, occupancy
was 29.6 percent on Christmas Eve and 30.0 percent on Christmas Day, compared with 32.1 percent and 32.5 percent
last year, a 7.7 percent decline for each day. For New Year's Eve, occupancy was 57.3 percent, a 4. 5 percent decrease
from 2000-2001, and New Year's Day 2002 occupancy was 30.4 percent, a 5 percent decrease from 2001.
PricewaterhouseCoopers research indicates that factors affecting holiday
occupancy, in ranked order, were concerns about:
1. the economy
2. air travel inconvenience
3. possible air travel delays from perceived threats
4. safety
For 2001, according to PricewaterhouseCoopers, occupancy decreased to 60.3 percent from 63.7 percent in 2000. In
2002, PricewaterhouseCoopers forecasts lodging industry occupancy will continue to decline to 59.6 percent, the
lowest hotel occupancy level since 1971. PricewaterhouseCoopers forecasts that no chain scale segment will enjoy
occupancy gains until 2003.
By 2003, demand growth will increase amid supply growth of only 0.8 percent, allowing occupancy to increase to
60.8 percent.
This year's holiday occupancies were the lowest since 1990; the 2001 fourth quarter's occupancy is estimated at
54.8 percent, which is the lowest since 1971.
``Although the holidays showed significant occupancy declines compared with the prior year, December's overall
results reflect the industry's gradual improvement over the last three months. Special rates and packages contributed
to the positive holiday occupancies,'' said Bjorn Hanson, Ph.D., global industry leader, PricewaterhouseCoopers
Hospitality & Leisure Practice.
PricewaterhouseCoopers is the leader in econometric modeling and providing reliable U.S. lodging industry forecasts
that offer true industry-wide samples based on proven econometric models. The group predicted every industry turning
point in the last ten years, usually two years in advance of each market move.
In July 1991, PricewaterhouseCoopers predicted a return to profitability for the industry in 1993, and average
daily room rates surpassing inflation. In April 1996, PricewaterhouseCoopers issued an early alert that there would
be an occupancy decline in 1997. In October 1996, the firm predicted occupancies would decline in 1997. And in
September 1997, PricewaterhouseCoopers said room starts would decline in 1998.
In January 2000, PricewaterhouseCoopers forecasted a U.S. lodging industry slowdown in late 2000 and early 2001.
The firm's research models have recently been refined and enhanced to improve the estimation of future room starts
and to enable more precise estimation of the interactions between lodging statistics and the macro economy. They
also provide reliable estimates of future lodging statistics of the U.S. at the industry segment, the regional
and the local market level.
Recently, PricewaterhouseCoopers applied the same econometric modeling to the local level and can now offer forward-looking
Market Outlooks. These local forecasts rely on extensive lodging data collection, empirical studies and solid econometric
models to support all positions and conclusions. The Market Outlooks are patterned after the structure of the U.S.
industry econometric model.
PricewaterhouseCoopers Hospitality and Leisure Group provides services including management, technology, human
resources and financial consulting in North America, Europe, the Middle East, Africa and Asia Pacific. The group
has a partnership with Smith Travel Research.
PricewaterhouseCoopers (http://www.pwcglobal.com) is the world's largest
professional services organization. Drawing on the knowledge and skills of more than 150,000 people in 150 countries,
we help our clients solve complex business problems and measurably enhance their ability to build value, manage
risk and improve performance in an Internet-enabled world.
PricewaterhouseCoopers refers to the member firms of the worldwide PricewaterhouseCoopers organization.
SOURCE: PricewaterhouseCoopers