January 30, 1998

Smith Travel Research (STR) announced 1997 fourth quarter and full calendar-year results for the U.S. lodging industry today.

Fourth quarter 1997 industry occupancy was 58.8 percent, a decline of 0.7 percent versus the same
period 1996. Average room rate gained nearly 6 percent to $75.38 in the quarter and revenue per available room (REVPAR) --- the combination of occupancy and average room rate and a key industry productivity measure --- increased over 5 percent to $44.34.

Industry room supply (roomnights available) increased by 3.6 percent in the quarter, the highest fourth quarter room supply growth since 1988. Industry demand (roomnights sold) increased 3 percent versus third quarter 1996. Room revenue grew almost 9 percent, a decrease of over 6 percent versus same period 1996.

For full year 1997, industry occupancy fell 0.8 percent to 64.5 percent and average room rate grew over 6 percent to $75.16. REVPAR gained over 5 percent to $48.50. The 1997 industry occupancy decline of 0.8 percent was the largest calendar year drop since 1991.

Industry room supply grew 3.4 percent, significantly higher than the 2.3 percent supply growth in 1996. Demand gained 2.5 percent in 1997, moderately higher than 1996 growth of 2.1 percent. Room revenue for the industry was over $62 billion in 1997, an increase of nearly 9 percent over 1996.

Among the largest twenty-five U.S. markets, New York City was particularly strong in 1997. Demand increased nearly twice as fast as supply and occupancy climbed to 80.5 percent. Room rates increased over 12 percent to more than $169, easily the highest absolute room rate among the top twenty-five markets. Revenue per available room gained nearly 14 percent. Markets with significant 1997 supply growth include Atlanta (+9.7 percent), Dallas (+8 percent), and Nashville (+7 percent).

"Room supply growth increased significantly in 1997 while demand growth was moderate compared with 1996," said Randell A. Smith, CEO of Smith Travel Research. "As we move into 1998, we expect to see a continuation of current trends with somewhat lower industry occupancy and moderating room rate growth."

Smith Travel Research --- the leader in lodging industry tracking and analysis --- provides regular industry reporting to all major U.S. chains, many independent hotels, and a variety of management companies and hotel owners. The company also tracks lodging industry performance in Canada and Mexico.