PWC Predicts Continued Hotel Demand Dip For 1Q03

PricewaterhouseCoopers today estimated that the U.S. hotel industry would lose bookings equivalent to 84,000 guest rooms a night in the first quarter of the year due to traveler concerns about safety and security. Chief among these concerns is the prospect of military action in Iraq. According to PwC, 79,000 rooms nightly were lost in the fourth quarter of 2002. In the second and third quarters of 2003, the nightly loss is projected to be 87,000 room nights and 92,000 room nights, respectively. The projections reflect but don't distinguish between leisure and business travel. Adding to the industry's woes are a decrease in consumer confidence and continued volatility in the financial markets. For buyers, decreased demand for hotel rooms increases their negotiating leverage on the assumption they still can deliver on their volume projections or at least be able to move marketshare in a destination to a given provider.