Just days into the war, a PriceWaterhouseCoopers survey found that more than 20 percent of booked rooms were cancelled over the next seven days in key meetings industry cities, including San Francisco, Las Vegas, New York, Chicago, Miami, Dallas, and Orlando. PWC lodging industry analyst Bjorn Hanson told the Los Angeles Times on March 24 that bookings over the next few weeks would plummet 5 percent from pre-war forecasts. "The markets being penalized are those with a higher percentage of international travelers and those with a higher percentage of air travel," Hanson told the Times. In a Reuters report, Hanson said, "cancellations appear to be outpacing new reservations."
Under the scenarios released by the Center for Strategic and International Studies, upon which PWC based its lodging forecasts, the most likely scenario is still a brief war that lasts four to six weeks, entails no significant reduction to oil supplies, and ends with a U.S. victory. Under this scenario, PWC predicts that RevPAR will decrease for the first half of this year, and bounce back to baseline growth by the year’s end, resulting in a 0.5 percent increase for the year. Under CSIS’ intermediate and worst-case scenarios, PWC forecast RevPAR decreases of 0.1 percent and 3.6 percent, respectively.
Smith Travel Research also found RevPARs falling as a result of the war. By the end of the first week of war, the firm found an 8.4 percent drop from this time last year; average room rates fell 3.8 percent. Hardest hit were the biggest money-makers: high-end properties in large cities. Luxury hotels fared poorly, being down 10.3 percent, while urban hotels overall went down 11.8 percent.
The U.S. ally in war is also feeling the effects, with a 4.3 percent drop in occupancy and a 2 percent decrease in room rates in the London hotel market, according to the United Kingdom arm of industry analyst firm PKF.