Real GDP growth is forecast to slow to 2.2 percent for 2001. PricewaterhouseCoopers forecasts room demand will expand by only 1.9 percent and average daily rates will increase by 3.8 percent. These are the slowest growth rates since 1993. Occupancy is expected to fall to 62.9 percent, with RevPAR growing by only 2.8 percent, just above the rate of inflation as measured by the Consumer Price Index, and the slowest growth since 1992.

�Even with the U.S. economy�s performance, we believe the lodging industry will experience profit growth in 2001, but that growth of 4.6 percent to $25 million will be the smallest since 1992,� said Bjorn Hanson, Ph.D., Global Industry Leader, PricewaterhouseCoopers Hospitality & Leisure Practice.

�The industry is currently operating at a substantial premium to break-even occupancy with high profit margins following a decade of restructuring, intense focus on increasing profit margins and productivity, adoption of new technology, close partnerships with other tourism related product providers, and close Wall Street scrutiny,� Hanson added.

According to Macroeconomic Advisers, real GDP is expected to grow to by 3.6 percent in 2002. During the same period, lodging RevPAR is forecast to regain some of its growth momentum. RevPAR is expected to grow by 4.3 percent in 2002. Room demand growth is expected to recover at 2.7 percent in 2002, with average daily rates growing by 3.9 percent in 2002. Occupancy will grow
very slightly, by 0.2 percentage points in 2002.

PricewaterhouseCoopers is the leader in econometric modelling and providing reliable U.S. lodging industry forecasts that offer true industry-wide samples based on proven econometric models.