Hotel Occupancy, Rates Forecast to Rise Next Year

New York -- Meeting planners should expect further increases in U.S. hotel occupancy and room rates next year, but a slowing economy will moderate those increases as compared to this year, according to the latest forecast from PricewaterhouseCoopers.

Occupancy in 2007 is forecast to reach 64.3 percent, an increase of just one-tenth of one percentage point over this year, as compared with a gain of 1.1 point expected this year over 2005.

Average daily rates next year are predicted to increase 5.7 percent over this year, to $102.69, as compared to a 6.9-percent increase this year over last year, to $97.16.

"PwC's 2007 forecast predicts a slowdown of room demand growth reflecting the overall economic slowdown, precipitated by a combination of a weakening housing market, higher interest rates, higher energy prices, and moderating equity market gains," the professional services firm's hospitality practice said yesterday in releasing its forecast.

"Inflationary pressures are also forecast to moderate," the report continued, "which together with the acceleration in room supply, will result in RevPAR (revenue per available room) growth of 5.9 percent."

RevPAR this year, by contrast, is forecast to increase 8.7 percent, the highest growth rate since 1980.

Occupancy this year is predicted to be the highest since 1996.