A robust lodging market should spur a 30% increase in hotel profits this year, reports PricewaterhouseCoopers. The firm also predicts that hotel profits will increase by 25% in 2005. But it gets even better in 2006 when profits are expected to hit $25.2 billion.

Strong business travel over the past 12 months is driving this surge. PwC predicts that hotel profits will hit $16.6 billion this year while 2005 will see $20.8 billion in profits. In 2003, by comparison, hotels posted only $12.8 billion in profits—roughly half of what PwC forecasts they will earn next year.

What does all of this add up to? Higher room rates over the next two years, reports PwC. They forecast that average daily rates at U.S hotels will rise by 4.3% next year. Occupancy is also expected to climb from 61.1% in 2005 to 62.9% in 2005.