The Hospitality Services Group of Ernst & Young has revised its growth and profitability forecasts for the U.S lodging industry in 2001 due repercussions from the September 11 attacks.

The firm’s original 2001 forecast (released in January 2001) included a projected growth in the national revenue per available room of 3.7 percent or $56.33. Due to continuing reductions in business and leisure travel, the firm now projects a revPAR decline of 5.2 percent for 2001, for an overall 2001 revPAR of $51.

The projected 2001 occupancy rate of 63.7 percent was already lower than 2000 due to reductions in business travel. Now Ernst & Young forecasts that the national average occupancy will fall an additional 3.2 percent to 60.5 percent for the year. This occupancy figure is the lowest in ten years, when during the Gulf War occupancy dropped to 61.8 percent.

"The combination of the economic slowdown and tragic events of September 11 have led to the worst occupancy rates we've seen in ten years," says Chase Burritt, national director of Ernst & Young's Hospitality Services Group.

Burritt expects business travel to be the first area to recover. One of the bigger losses during the month of September was the loss of conventions that canceled and did not reschedule. Conventions should be going ahead on schedule for the rest of the year and with and business travel should slowly resume. Burritt also says that many hotel operators may have to offer lower room rates and the average daily rate (ADR) across the country will likely fall to $85 by the end of the year. (ADR for 2001 was originally forecasted at $88.)

For full coverage of the aftermath of 9/11, go to Meetingsnet 9/11 Special Report