"Throughout this holiday season, U.S. hotel occupancy rates will continue the gentle decline they began in 1997," observes Bjorn Hanson, Ph.D., New York-based global partner in the PricewaterhouseCoopers lodging, gaming and leisure group. "As a result, it will be easier to find a hotel room in some U.S. cities," he says, "but not in America's gateway destinations such as New York, Boston and Chicago, where occupancy rates remain robust."

U.S. average daily room rates will continue to rise faster than the rate of inflation. Steady -- but moderating -- growth in demand for hotel rooms will permit hoteliers to raise room rates 4.8 percent in the fourth quarter of 1998 over the year-earlier period. That should fuel another year of record profits for the hotel industry, Dr. Hanson reports.

New York City: At Capacity

Travelers to Manhattan this holiday season will find a scarcity of rooms -- and room rates that are lofty, PricewaterhouseCoopers says.

Manhattan hotels will enjoy a remarkable 84 percent occupancy in the fourth quarter of this year. That's up from 82 percent occupancy in the year-ago period, according to a proprietary survey of 70 Manhattan hotels by PricewaterhouseCoopers.

Average daily room rates in Manhattan will be approximately $245 in the fourth quarter. That's up 15 percent from $213 in the year-ago period. Rates at some of New York's deluxe hotels will range from $350 to more than $700 for a standard room between Thanksgiving and New Year's, the firm says.

"It will be undeniably difficult for travelers to find a hotel room in Manhattan this holiday season," says Sean F. Hennessey, New York practice director of the PricewaterhouseCoopers hospitality and leisure practice.

"Eighty-four percent occupancy is essentially Manhattan's capacity." One hundred percent occupancy is never possible because of rooms renovations and other factors, Mr. Hennessey explains. Over time, several new Manhattan hotels in the works will help the room availability picture, Mr. Hennessey says.

"Meanwhile, robust revenue streams are bringing historic profitability to most Manhattan hotels -- and a record number of renovations and property upgrades," Mr. Hennessey notes. That's a big plus for travelers to Manhattan, he adds.

Hawaii: Rooms and Reasonable Rates

Travelers to Hawaii will find more rooms this holiday season than last.  Hawaii's hotel occupancy will be a still-strong 72.0 percent in the fourth quarter, down from 74.2 percent a year ago, the firm says.  Meanwhile, average daily room rates will inch higher to $127.00, up from $123.85 at 1997's year-end.

"Hawaii continues to be a desirable destination, with occupancy levels that allow for some choice in rooms -- and room rates that maintain reasonable levels," observes Honolulu-based PricewaterhouseCoopers director Joseph Toy. "Room rates have risen slower in Hawaii than on the mainland," he adds. In Hawaii, room rates rose only slightly faster than the U.S. inflation rate in the fourth quarter of this year versus last, while on the mainland, rates have risen at three times the rate of inflation during the same period.

PricewaterhouseCoopers (http://www.pwcglobal.com), the world's largest professional services organization, helps its clients build value, manage risk and improve their performance. Drawing on the talents of more than 144,000 people in 152 countries, the organization provides a full range of business advisory services to leading global, national and local companies and to public institutions. PricewaterhouseCoopers refers to the US firm of PricewaterhouseCoopers LLP and other members of the worldwide PricewaterhouseCoopers organization.