PricewaterhouseCoopers predicts that revenue per available room (revPAR) for 2001 will decline 3.5 to 5.0 percent, the worst performance in the 33 years for which data is available. RevPAR had actually increased 3.6 percent in the first quarter, before a slide to a 3.6 percent decrease in the second quarter. The decline for the second half of the year is forecast in the 7 to 10 percent range.
"Even with the record declines in RevPAR forecast, there will not be an industry aggregate loss. Profits for the year will decline to between $18 and $20 billion compared with 2000 record profit of $23.5 billion," said Bjorn Hanson, Ph.D., global industry leader, PricewaterhouseCoopers Hospitality & Leisure Practice.
Citing factors such as a decline in leisure travel, particularly to New York City, short-term airline disruption, the traveling public's safety concerns, stock and commodity market volatility, costs and inconveniences of increased security, and the damage done to Lower Manhattan.
"These are the most difficult circumstances with the greatest uncertainty for developing forecasts. We anticipate revisions, which may be substantial, as additional underlying economic forecasts and other information become available," says. Hanson, "This forecast assumes no further acts against the U.S. and no large-scale military action that would have an effect on travel for the rest of the year."
While the lodging industry may resist further declines in RevPAR in 2002, PricewaterhouseCoopers says it does not expect that the industry will achieve growth equal to inflation.
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