PwC Predicts Record Rate Increases

PricewaterhouseCoopers' latest hotel industry report, released this week, forecasts average daily rate will increase by 5.6 percent year-over-year or $5.08—the industry's highest dollar increase in 24 years.

"Although the national average rate of increase of 5.6 percent is high, the increases in many cities, including New York, San Francisco, Honolulu, Boston and others, will be even higher—7 to more than 10 percent," said Bjorn Hanson, global head of PwC's hospitality and leisure practice, in a statement.

Capitalizing on rising occupancy rates and diminishing supply growth—less than 1 percent in 2005, according to Smith Travel Research—hoteliers are keen to raise rates and bump up profits. PwC predicted that the hotel industry will gross $25.2 billion this year, almost $5 billion more than last year.