and Midscale without F&B) Experiencing Robust
Performance Improvements in 2004
|NEW YORK, March 8, 2004 After three years
of industry wide contraction,
PricewaterhouseCoopers forecasts lodging demand will increase 4.5 percent in 2004, and lodging industry supply will grow 1.4 percent in 2004. As a result, lodging occupancy will advance by 0.9 percentage points to 61.2 percent, and RevPar for the industry will increase by 5.3 percent. (PricewaterhouseCoopers forecast more than a year ago, in December 2002, that 2004 RevPAR would increase by 5.1 percent, compared to 2003 levels.)
Upscale, Upper Upscale, Midscale Without F&B
Three of the five lodging segments are experiencing the most robust performance improvements: Upper Upscale, Upscale and Midscale without Food & Beverage (F&B).
Each of these segments will experience robust demand increases.
PricewaterhouseCoopers forecasts Upper Upscale demand to increase by 5.4 percent in 2004, Upscale demand to increase by 7.9 percent in 2004 and Midscale without F&B to increase by 7.5 percent.
The increases in demand levels will allow Upper Upscale hotels to achieve a higher premium average daily rate (ADR), as ADR increases by 1.9 percent from $137.61 to $140.15. Upscale hotels will achieve ADR growth of 2.1 percent from $91.24 to $93.11. Midscale without F&B will continue to achieve strong ADR growth of 1.9 percent from $68.48 to $69.77.
We will not see a rapid growth in occupancy in these segments, because supply growth has been the strongest in these three segments, said Bjorn Hanson, Ph.D., global leader, PricewaterhouseCoopers Hospitality & Leisure Practice.
Upper Upscale supply will grow by 1.3 percent in 2004 and 1.5 percent
PricewaterhouseCoopers forecasts occupancy for Upper Upscale properties to be 69 percent in 2004, and RevPAR will grow by 5.9 percent in 2004.
PricewaterhouseCoopers forecasts occupancy for Upscale properties will be 68.8 percent in 2004 and RevPAR will grow by 6.7. PricewaterhouseCoopers forecasts occupancy for Midscale without F&B will be 64.3 percent, and RevPAR will grow by 5.8 percent in 2004.
Economy, Midscale with F&B
The two segments that will be experiencing lesser performance improvement
include: Economy and Midscale with F&B. Demand and ADR will increase
by 2.6 percent and 1.1 percent in the Economy sector and 0.7 percent and
0.6 percent, respectively, in the Midscale with F&B in 2004. Economy
sector occupancy will be 54.6 percent and RevPAR growth will be 3.2 percent
in 2004. Midscale with F&B occupancy will be 56.3 percent and RevPAR
will increase by 2.4 percent in 2004.
|Also See:||Dramatic Increases in U.S. Lodging Industry IPOs, Equity Offerings and M&A Activity Will Occur in 2004 / March 2004|
|Economic Revival in Second Half of 2003 Builds Momentum for Robust Lodging Demand Recovery in 2004 / October 2003|