Flat '03 For Hotels Perked Up In Second Half

The U.S. lodging industry's 2003 performance overall was flat with 2002, according to data released today by Henderson, Tenn.-based tracking firm Smith Travel Research. However, occupancy and revenues improved as 2003 progressed, leading STR president Mark Lomanno to project that the positive movement would continue in 2004.

Full-year 2003 industry occupancy was 59.2 percent, up 0.2 percent versus 2002. Average room rate declined 0.1 percent to $83.28 and revenue per available room increased 0.2 percent to $49.34.

Meanwhile, industry room supply increased 1.3 percent in 2003, while demand (room nights sold) gained 1.6 percent. Full-year 2003 room revenue increased 1.5 percent, to $79.9 billion.

"The industry's operating performance began to gain traction in the second half of the year," Lomanno said. "We expect this momentum to continue in 2004. Healthy demand growth combined with continued moderate room supply increases should strengthen occupancies." STR's forecast was based on two assumptions: that the U.S. economy continues to improve and that no major terrorist attacks occur on U.S. soil.

To put the 2003 data in context, the year's performance was lukewarm compared with the industry's showing in 2000, a banner year. Occupancy levels in 2000 were 63.3 percent, ADR jumped 5.6 percent over 1999 and RevPAR growth increased 6.3 percent.