NEW YORK, May 22, 1998 - Memorial Day travelers will find average daily hotel room rates higher this year than last by more than double the rate of inflation -- and increases of close to 15 percent in many resort areas and some cities, according to an exclusive forecast from Coopers & Lybrand on the Lodging Research Network http://www.lodgingresearch.com , the Internet-based resource for lodging industry data and information from Coopers & Lybrand L.L.P. Although overall U.S. hotel occupancy rates will actually decline in 1998 versus 1997, travelers will continue to have difficulty obtaining rooms in major markets such as New York City, Boston, Chicago and San Francisco.
The average daily rate for a U.S. hotel room will rise 5.0 percent to $78.94 in 1998 from $75.17 in 1997, according to the forecast by Coopers & Lybrand on the Lodging Research Network . Overall U.S. hotel occupancy rates will decline 0.7 percentage points to 63.9 percent in 1998 from 64.62 percent in 1997, the forecast says.
"Driving room rates higher is strong demand for U.S. hotel rooms," explains Bjorn Hanson, Ph.D., New York-based chairman of the Coopers & Lybrand lodging and gaming group, creators of the Lodging Research Network . "We forecast that demand for rooms will rise 2.8 percent this year over last year," he adds.
Pushing hotel occupancy rates lower is the construction of new hotel rooms across the nation. Approximately 139,800 new rooms will open this year, according to the Lodging Research Network.
Still, it will be difficult to find hotel rooms -- especially in upscale, full-service hotels -- in major markets such as New York City, Boston, Chicago and San Francisco this Memorial Day weekend and throughout the year, the Lodging Research Network reports.
"Major U.S. cities will continue to enjoy occupancy rates well above the national average of 67 percent in 1998," Hanson explains, "while secondary and tertiary markets will see occupancy rates in line or lower than the national forecast of 63.9 percent," he adds.
Coopers & Lybrand uses a proprietary econometric model to forecast U.S. lodging industry trends. Underlying macroeconomic assumptions are from the WEFA Group, the Philadelphia-based macroeconomic forecaster.
The accuracy of Coopers & Lybrand's econometric forecasts for the lodging industry is well established. In 1991, when the lodging industry was experiencing declining occupancy and financial losses, Coopers & Lybrand forecast that 1993 would bring a return to profitability and average daily rate increases greater than inflation. Both predictions proved accurate. In the first quarter of 1996, Coopers & Lybrand was the first consulting firm to forecast a coming downturn in hotel occupancy. The firm's occupancy "early warning" was issued in April of 1996.
Coopers & Lybrand's Lodging Research Network makes available via the Internet Coopers & Lybrand's renowned econometric forecasts for the lodging industry, breaking lodging industry news, an exclusive database of lodging industry real estate acquisitions, financial data of publicly traded lodging companies (including SEC filings), new hotel construction data, lodging census data from Smith Travel Research as well as an extensive research library that includes U.S. econometric and demographic statistics. For more information about the Lodging Research Network, call toll-free 888-576-6656.
One of the world's leading professional services firms, Coopers & Lybrand L.L.P. provides services for enterprises in a wide range of industries. The firm offers its clients the expertise of more than 19,000 professionals and staff located in 100 U.S. cities and, through the member firms of Coopers & Lybrand International, more than 82,000 people in 138 countries worldwide.