Successful Meetings - February 2008 - (Page 16)

News & Analysis > Research PwC Report Says Hotel Supply Still Tight ing higher room and F&B rates.” Despite plenty of construction On top of that, Hanson said activity and business moves in Average Daily Rates $104 suppliers will be tacking on sur2007, PricewaterhouseCoop$102 charges and might even start ers (PwC) delivered mixed $100 $98 charging meeting room setup results for the hotel industry— $96 fees. and mixed news for meeting $94 $92 “The hurricanes in 2005 realplanners—in its annual U.S. $90 ly had a dramatic effect on both hotel industry report. While the $88 supply and demand dynamics by number of room starts was $86 $84 putting a large number of rooms above PwC’s calculated long$82 out of service,” said Hanson. term average for the second $80 1999 2000 2001 2001 2003 2004 2005 2006 2007 That year, hotel supply posted straight year, U.S. hotel occunegative growth against 2.8-perpancy this past October (most Lodging Construction (Room Starts) 180,000 cent demand growth, tightening recent data available) hovered 160,000 the market. While demand around 65 percent, marginally growth has slowed since, supply better for hoteliers than Octo140,000 growth inched up 0.2 and 1.3 ber 2006’s 63.3 percent. Both 120,000 lodging demand and supply percent in 2006 and 2007. 100,000 growth are below their longThe good news for planners 80,000 term averages, according to is that the lodging construction PwC, based on data from rate is recovering to historical60,000 Smith Travel Research. high levels. Work on about 40,000 1999 2000 2001 2002 2003 2004 2005 2006 2007* “Despite how good the hotel 150,000 new rooms began in *estimate SOURCE: PRICEWATERHOUSECOOPERS industry feels, growth is still 2007, after five years of belowsince 2006, according to PwC statistics. below the long-term trend,” said Bjorn average room starts, said PwC, working Yet, the fact also remains that it is still Hanson, principal of PwC’s hospitality on data by F.W. Dodge. And, the dollar is a seller’s market for meeting planners and leisure group, at a briefing at PwC’s forecast to strengthen against the euro scouring for group rooms and meeting New York City headquarters in midthroughout this year (by 5.8 percent) and space, as U.S. hotel supply remains tight. December. into 2009, increasing U.S. planners’ buyEchoing recent sentiment, Hanson sugThe news on hotel rates was similar. ing power in Europe and perhaps lowergested that planners look for opportuniWhile the industry’s average daily rate ing European demand for U.S. meetings. ties in second- and third-tier destinations (ADR) eclipsed the century mark for the —William Ng for availability and deals. first time in 2007, at $103.70 in October, Hanson said 2008 “won’t be transforthe rate was still below PwC’s long-term mational” for planners, forecasting a average, after accounting for inflation. ACOM Turns 20 mixed bag under present market condiAnd, Hanson said, “take inflation out, and In the January issue it was erroneoustions. Despite gas prices being at their it’s only slightly above the 2000 rate. The ly reported that the Association of greatest level since 1980 and forecast to bad news for the hotel industry is that all Convention Operations Management rise 6.6 percent this year, a PwC calculathe innovations it has made, such as flat(ACOM) was celebrating its 30th tion shows that they dampened lodging screen TVs and Internet access, have not anniversary in 2008. ACOM is in fact demand by just 0.5 percent. resulted in real ADR growth.” celebrating its 20th anniversary this “Hotel availability will ease a bit,” he Moreover, ADR growth for hotels—as year. said of the tight supply, but because of well as revenue per available room pent-up demand, “hotels can keep charg(revPAR) growth—has been slowing Correction 16 FEBRUARY 2008 SUCCESSFUL MEETINGS

Table of Contents for the Digital Edition of Successful Meetings - February 2008

Successful Meetings - February 2008
Editor's Note
Trade Shows
On the Record
Planner's Spotlight
Websites of the Month
Technology Talk
Personal Success
Food & Beverage
On Site
Tools of the Trade
The Rainbow Connection
The CVB in Your Backyard
Welcome to the Webolution
The Rail Deal
Spas with a Sense of Place
Places & Spaces
Mystic, CT.
Hong Kong
Florida’s East Coast
Atlantic City
Maui, Kauai, & Lanai

Successful Meetings - February 2008