On The Horizon: PwC Sees U.S. Hotel Supply Squeeze Driving Up Rates - Business Travel News

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On The Horizon: PwC Sees U.S. Hotel Supply Squeeze Driving Up Rates

November 29, 2010 - 02:20 PM ET

U.S. hotel industry growth will soon shift from occupancy-driven to rate-driven, according to a forecast issued this month by PricewaterhouseCoopers' Hospitality & Leisure Practice that projects U.S. average daily rates to increase by 4.8 percent year over year in 2011. European hotels, meanwhile, can expect slower growth, according to a forecast issued by Deloitte. U.S. demand this year has recovered to 2007 levels, PwC said, adding that room supply would increase by 2 percent this year and by only 0.4 percent in 2011, giving hotels the opportunity to boost rates. The forecast calls for a 7.4 percent jump in U.S. revenue per available room in 2011, its highest increase since 2006. Europe's hotel recovery, on the other hand, will continue on a "muted but upward path" in 2011, according to Deloitte. As of September, year-to-date RevPAR had increased by 9.5 percent compared with 2009, but average daily rates were down slightly. Growth has been stronger outside the Eurozone, with RevPAR up 11.2 percent as of the end of September. Within the Eurozone, that growth was only 7.6 percent. Cities in Germany, including Munich, Düsseldorf and Frankfurt, have seen more than 20 percent growth in RevPAR during that period, however.

European Parliament Renews PNR Exchange Criticism

The European Parliament this month again called for the European Commission to "explore less intrusive alternatives" to the comprehensive collection of airline passenger data by countries outside the European Union. The United States is one of a handful of countries that gathers passenger name records and other personal details of all passengers who cross its borders. The European Union and the United States recently have started discussions on a general data protection agreement and a new version of their more specific agreement on sharing passenger flight data. Parliament has the right to veto both accords, according to a statement it issued this month. The resolution passed by the European Parliament asked the Commission to provide "factual evidence that the collection, storage and processing of PNR data is necessary," and emphasized that "PNR data shall in no circumstances be used for data mining or profiling." Last month, the European Data Commissioner expressed "major concerns as regards the necessity and legitimacy" of PNR collection schemes by national governments. A separate position adopted by the Parliament took another swipe at the U.S. Travel Promotion Act, which led to the imposition from Sept. 8 of a $14 application fee on U.S.-bound visitors for Electronic System for Travel Authorization, which they must obtain to enter when using a visa waiver. European officials have complained that the fee is tantamount to a visa charge, but the latest communiqué from the Parliament also voiced concerns about matters related to data privacy. It said the fee "can only be paid with one of the four major credit cards, whose companies are all based inside the U.S."

AA, JetBlue Begin Frequent Flyer Reciprocity

American Airlines and JetBlue Airways this month launched frequent flyer reciprocity "in select markets," after the two carriers expanded an interline agreement announced in March. Frequent flyer reciprocity will apply to markets on which the carriers interline, which after an expansion announced this month will include 26 JetBlue domestic routes and 15 American international routes, up from the 18 JetBlue routes from Boston or New York that connected with 12 international American destinations available when the carriers launched the partnership in March. The carriers added to the interline agreement several JetBlue domestic destinations from Boston, including Baltimore, Orlando, Pittsburgh, Phoenix and Washington National, and one new American route, New York JFK-Budapest, which launches next year.

EasyJet Confirms Plans For Flexible Business Fares

European low-cost carrier EasyJet confirmed this month the launch of its first-ever flexible fares, available only through business booking channels, including global distribution systems and self-booking tools. EasyJet said it would make them available through its website "at a later date." Flexible-fare passengers can change their flight up to two hours before departure and rearrange their flights for any time between one week before and three weeks after the original date of departure. The premium fare also includes priority boarding—useful because EasyJet passengers are not assigned specific seats—one free checked bag and a waiver on booking fees. EasyJet claimed to have a 4 percent share of the European short-haul business travel market and said it would particularly target corporate business in France, Switzerland and the United Kingdom.

This report appears in the Nov. 29 issue of Business Travel News.

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