Two key factors will diminish RevPAR growth: A slowing in the U.S. economy�s GDP growth, forecast by Marcroeconomic Advisors to decrease from 4.4 percent this year to 2.8 percent next year; and the opening of a record amount of new supply, with new construction starts reaching a record high in 1998 of 161,900 rooms and 148,200 rooms in 1999. The previous record was in 1985, when construction starts reached 155,800. In 1997, construction starts were 155,100.

�With the strength of the U.S. economy this year, the lodging industry will witness a demand increase of 3.6 percent.  This will mitigate some of the effects of the rapid new supply in the market,�said Bjorn Hanson, Ph.D global industry leader of PricewaterhouseCoopers Hospitality Leisure Practice. �However as the economy settles into a more sustainable pace in 2001 and 2002, the lodging industry will face slower demand and slower RevPAR growth.� The year 2001 will be the RevPAR trough of this cycle. In 2002, PricewaterhouseCoopers predicts RevPAR growth will rebound to 3.5 percent.

PricewaterhouseCoopers forecasts rely on extensive lodging data collection, empirical studies and solid econometric models to support all positions and conclusions.

PricewaterhouseCoopers Hospitality and Leisure Group provides services including management, technology, human resources and financial consulting in North America, Europe, the Middle East and Africa. The group recently formed a partnership with Smith Travel Research.