PwC: U.S. Lodging Sector To Continue Strengthening During 2013 - Business Travel News

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PwC: U.S. Lodging Sector To Continue Strengthening During 2013

January 22, 2013 - 01:10 PM ET

By David Jonas

Lodging demand and pricing are "expected to remain on positive trajectories through 2013," according to the latest PricewaterhouseCoopers forecast, issued this week. In reporting "stronger lodging demand and economic activity that exhibits less retrenchment than expected," the firm now expects room-night demand within the U.S. lodging industry this year to increase 1.8 percent year over year, "which combined with still-restrained supply growth of 0.8 percent is anticipated to boost occupancy levels to 62 percent, the highest since 2007."

PwC also projected that revenue per available room would increase 5.9 percent, more than the firm previously expected and "representing the fourth year of lodging recovery." PwC forecast the average daily rate to rise 4.8 percent, which would be the largest increase since 2007.

Though it projected ongoing recovery in all hotel tiers, the firm forecast that "higher-priced segments are expected to experience the strongest gains." Citing "stronger business transient and group activity," PwC added that occupancy levels at hotels in the luxury, upper-upscale and upscale segments have already exceeded pre-recession peaks."

Issued quarterly, PwC said its projections are based on historical data provided by STR and "an updated macroeconomic forecast released by Macroeconomic Advisers." The December outlook from the latter, according to PwC, "anticipates slightly weaker economic growth in the first half of 2013, reflecting ongoing fiscal contraction and policy wrangling, uncertainty regarding the eurozone crisis and still-impaired bank and household balance sheets." The second half of the year would see "stronger economic growth," and Macroeconomic Advisers "now expects real gross domestic product to increase by 2.6 percent in 2013, measured on a fourth-quarter-over-fourth-quarter basis," PwC added.

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