PwC Predicts Hotels Will Continue To Cut Services

The U.S. lodging industry will continue to cut costs aggressively in 2002 to maintain profitability, according to projections released yesterday by PricewaterhouseCoopers. PwC estimated that hotel profitability for 2002, in fact, will increase to $17.2 billion, from $16.7 billion in 2001, due, in large part, to these expense controls. Revenues are expected to rise to $109.7 billion this year, from $108.7 billion.

Many of the expense reductions directly impact the guest, raising concerns among buyers that travelers' experience in the hotels, particularly at the upper upscale and deluxe price points, will be compromised.

According to PwC, travelers increasingly can expect to see a reduction in hours of bell staff, doormen and concierges; changes in food service from waiter to buffet, more limited menus and fewer high-cost food items; cutbacks in restaurant and room service hours of operation; and fewer in-room amenities, such as complimentary bottled water and designer bath amenities.