Negotiated Room Rates Expected To Decline In 2002

Average negotiated room rates are forecast to be down 5 percent for the year, according to UBS Warburg lodging industry analysts. Compared with the banner year of 2000, spending on hotels this year is expected to decline 10 percent to 20 percent.

However, corporate spending on hotels by large companies in 2002 is not expected to change relative to 2001.

Separately, industry tracking firm Smith Travel Research released preliminary data on U.S. occupancy rates and room revenues for the month of January. Consistent with industry performance for most of 2001, January was expected to see both occupancies and room revenues fall, compared with the performance of January 2001. While overall occupancy rates were estimated to fall 6 percent to 8 percent, revenue per available room was expected to drop 12 percent to 14 percent.