Average Daily Rates at U.S. Hotels to Rise Faster Than Inflation In 1998, The Lodging Research Network Says Luxury Hotels Will Experience Biggest Rise

"Consistent -- but moderating -- demand for U.S. hotel rooms is fueling increases in hotel average daily room rates greater than inflation," notes Bjorn Hanson, Ph.D., New York-based chairman of the Coopers & Lybrand lodging and gaming group, creators of the Lodging Research Network. " Demand for hotel rooms in the U.S. will rise 2.8 this year -- and more moderately at 2.0 percent in 1999," Hanson adds.

ADR will rise most slowly at the nation's economy hotels, according to the Lodging Research Network. That hotel segment will experience an ADR increase of 3.7 percent to $53.29 in 1998 from $51.39 last year, www.lodgingresearch.com reports.

The nation's budget hotels will experience increases in ADR somewhat greater than that of economy hotels. Budget hotels will experience an ADR rise of 4.0 percent in 1998 to $43.68 from $41.98 in 1997, the Lodging Research Network says.

America's upscale hotels will experience a 1998 ADR increases of 4.6 percent to $92.71 from $88.64 last year, www.lodgingresearch.com reports. Meanwhile, ADR at midprice hotels will rise 5.3 percent to $71.69 in 1998 from $68.06 in 1997, according to www.lodgingresearch.com.

"The travel economy is robust, and hotel bargains will be somewhat more difficult to locate this summer than last," Hanson observes.

Coopers & Lybrand uses a proprietary econometric model to forecast U.S. lodging industry trends. Underlying macroeconomic assumptions are from the WEFA Group, the Philadelphia-based macroeconomic forecaster.

The accuracy of Coopers & Lybrand's econometric forecasts for the lodging industry is well established. In 1991, when the lodging industry was experiencing declining occupancy and financial losses, Coopers & Lybrand forecast that 1993 would bring a return to profitability and average daily rate increases greater than inflation. Both predictions proved accurate. In the first quarter of 1996, Coopers & Lybrand was the first consulting firm to forecast a coming downturn in hotel occupancy. The firm's occupancy " early warning" was issued in April of 1996.

Coopers & Lybrand's Lodging Research Network (www.lodgingresearch.com) makes available via the Internet Coopers & Lybrand's renowned econometric forecasts for the lodging industry, breaking lodging industry news, an exclusive database of lodging industry real estate acquisitions, financial data of publicly traded lodging companies (including SEC filings), new hotel construction data, lodging census data from Smith Travel Research as well as an extensive research library that includes U.S. econometric and demographic statistics. For more information about the Lodging Research Network, call toll-free 888-576-6656.

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