Economy, Not Fear, At Fault For Low Occupancies

Anecdotal evidence during the past few months suggested that the severe drop in U.S. hotel occupancies was attributable more to the slowdown in the economy than to fears about security.

Data released today by PricewaterhouseCoopers confirmed this impression. Based on its econometric model, PwC noted that actual lodging demand decreased by 6.5 percent in the last quarter of 2001. Of that decrease in demand, 5.4 percentage points were the result of the economy, while only 1.1 percentage points were attributable to non-economic concerns such as travel safety and fear of flying related to terrorism. Therefore, PwC attributed 83 percent of the lodging demand decline directly to the economy.