The total amount of new construction across hotel tiers represents a 45 percent increase over the year before, according to the latest hotel construction forecast released today by PricewaterhouseCoopers, and is indicative of the largest three-year growth in revenue per available room since 1981. Most of the 119,000 hotel rooms on which construction began in 2006 are in the upscale and midprice without food and beverage tiers, according to PwC.
"The increase in construction activity in 2006 reflects the positive outlook in the industry for occupancy to increase by a full occupancy point to 64.3 percent and the average room rate to increase by 6.4 percent for an impressive RevPAR increase of 8.4 percent," said Bjorn Hanson, leader of PwC's hospitality and leisure practice. Although the new supply counts are impressive, Hanson added that the increase in supply still would not contain the growth in demand through 2007.
PwC's forecast corroborated similar findings by Portsmouth, N.H.-based, Lodging Econometrics, which earlier this year said that pipeline counts for midscale without F&B and upscale projects had risen over 30 percent year-over-year in 2005
(BTNonline, Apr. 3).