Hotel Online  Special Report



A Significant Increase in Hotel Renovations
Will Occur in 2004
U.S. Lodging Industry Will Spend $3 Billion on Renovations in 2004
NEW YORK, October 8, 2003 - "Forecast increased revenues for 2004 are supporting the plans of hotel owners and management companies to return to approximately 1998 levels for capital expenditures," said Bjorn Hanson, Ph.D., global leader, PricewaterhouseCoopers Hospitality & Leisure Practice.  "We expect to see the increased expenditures over 2003 levels in guestrooms, public spaces, function rooms and relationship management systems, and these are all more "guest facing" than the allocations in 2000."

In 2004, among changes to be seen in guestroom design:

  • better beds and bedding, in both comfort and quality of material
  • televisions set atop low-lying dresser drawers or cabinets, replacing the traditional armoire or televisions mounted on the walls of hotel rooms to take advantage of their space-saving design
  • adoption of local themes in exterior architecture, public space décor and restaurant themes (particularly in the upscale and upper-upscale hotels)
  • high speed internet access based on comments from an increasing number of guests expressing this as an important amenity
  • electronic "function boards" and directories and generally better signage
There will also be increased investments in guest history and yield management enhancements and links, and in another areas, employee training.

Rather than being totally market-driven, hotel renovations are in part result of capital budgeting calculation of a percentage of revenues. After record total revenue growth between 1993 and 2000, the hotel industry was in the fortunate position of having made significant capital investments in physical assets prior to the 2001 downturn.   In 2001 and 2002, capital expenditures represented among the largest dollar reductions of expense and expenditure categories.

PricewaterhouseCoopers Hospitality & Leisure research specialists develop lodging industry forecasts using econometric models. They assist clients in understanding past and future lodging industry trends.  Hospitality & Leisure research specialists have applied advanced statistical and econometric techniques on a variety of
engagements, making a difference to clients' profitability, market share, strategic direction, and visibility in the marketplace. 


Bjorn Hanson, Ph.D.
Also See: Economic Revival in Second Half of 2003 Builds Momentum for Robust Lodging Demand Recovery in 2004 / October 2003
PricewaterhouseCoopers Forecasts Lodging Industry Expenses Will Rise in 2003 / February 2003

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