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Report Indicates Slowing Growth for Business and Leisure
Hotel Demand for First 6 months of 2006 in U.S.
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New York, November 7, 2006 – PricewaterhouseCoopers research, supplemented by the U.S. Census Bureau, Smith Travel Research (STR) and Travel Industry Association of America (TIA) data, indicates that, following a decline after September 2001, total business demand for U.S. hotels increased by 4.6 percent in 2004, by 3.8 percent in 2005 and by 0.9 percent in year-to-date June 2006.  In comparison, total leisure demand grew by 3.3 percent in 2004, 1.7 percent in 2005 and declined by 2.2 percent in year-to-date June 2006. 

The hotel business demand per capita of the adult U.S. resident population grew by 2.6 percent in 2005 but is expected to slow to 0.8 percent in 20061.  Hotel leisure demand per capita of the adult U.S. resident population grew by 0.5 percent in 2005 but is expected to decline by 0.3 percent in 2006. Comparatively, hotel business demand per capita of domestic travelers in 2005 grew by 0.3 percent, while the hotel leisure demand per capita of domestic travelers declined by 1.7 percent during the same period. 
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Occupied Room Nights (in millions) - 1999 to Year-to-Date June 2006 

Source: Smith Travel Research

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According to Bjorn Hanson, Ph.D., principal in PricewaterhouseCoopers' Hospitality & Leisure practice, “Slowing per capita demand growth indicates that the industry is entering the mature phase of this cycle. The trends also reflect that businesses and consumers are responding to the cumulative increases in hotel rates. Still, demand growth continues to exceed increases in supply.” 

Over the last two years factors contributing to the continued but slowing growth in the hotel business demand per capita in the U.S. include: 

  • Accelerated global and U.S. macro-economic performance; 
  • Continued improvement in corporate revenues and earnings performances, adding to business confidence; 
  • Heightened traveler concerns about inconvenience related to additional airport security procedures; 
  • Increased gasoline prices, which have increased by 75 percent since 2000; 
  • Increased U.S. average daily rates (ADR), which increased by 5.4 percent over the prior year. 
The following graph and tables present the actual trend of business and leisure occupied room nights and per capita demand between 1999 and year-to-date June 2006. 

Business and Leisure Demand
Per Capita of Adult U.S. Resident Population 

Source: Smith Travel Research and U.S. Census Bureau. 

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Business and Leisure Demand
Per Capita of Domestic Travelers 

Source: Smith Travel Research and Travel Industry Association of America. 


1 A technique to analyze the increased number of occupied rooms is to calculate per capita business and leisure demand. The per capita analyses are based on (1) U.S. Census Bureau's adult U.S. resident population estimates and (2) the Travel Industry Association of America's (TIA) domestic person-trips estimates. 

About PricewaterhouseCoopers 
PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders.  More than 130,000 people in 148 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice. 

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Contact:

Christine Da Silva
Senior Manager, Trade Media Relations
Wyndham Hotel Group
1 Sylvan Way
Parsippany, NJ  07054
 (973) 753-6590
Christine.DaSilva@cendant.com

Also See: International Travelers to the U.S Increased by 6.7% in 2005; International Guest Room Nights Represent 10.3% of the U.S. Lodging Demand / August 2006
Hotels Charging Fees and Surcharges for Just About Anything; PwC Forecasting 7% Increase for U.S. Lodging Industry in 2006 / March 2006

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