Busy Summer On Tap For Hoteliers

The U.S. lodging industry will achieve a record number of occupied rooms per night, or 3.14 million, this summer, according to PricewaterhouseCoopers. This would build on the previous record of 3.08 million occupied rooms per night, achieved last year.

The summer occupancy in 2007 is forecast to be 69.6%, slightly lower than 2006 at 70.2%, but the second highest since the peak of 72.1% in 2001.

Occupancy levels for the three-day Memorial Day and Labor Day weekends will be 73.9% and 70.1%, the highest since 2000 and 2004, respectively. The occupancy rate for the five-day weekend of the fourth of July, which falls on a Wednesday this year, should be dispersed between the prior and later weekends, driving an occupancy rate of 69.2%.

The effect of increased gasoline prices on room night demand will be pronounced in 2007, with gasoline-induced occupancy declines concentrated in the second, third and fourth quarters of 2007. Between Memorial Day and Labor Day, an additional 10% (or roughly 30 cents per barrel) increase in the price of gasoline will result in approximately 8,000 fewer occupied rooms per night, or a 0.2% occupancy decline.

"This summer will be another great season for the lodging industry, although not another record year, as increasing supply exceeds demand growth during the summer for the first time in four years," says Bjorn Hanson, Ph. D., principal of the hospitality & leisure practice at Manhattan-based PricewaterhouseCoopers LLP.


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