Travel Industry To Perform Far Below Expectation For New Year's Eve 2000

Three variables have impacted performance negatively. Initial above-market pricing created low consumer demand. Travel companies increased the number of holiday packages they offered and over-supplied the market. Consumers feared traveling due to the possibility of Y2k mishaps.

"Performance will exceed last year, but will not surpass it by much in the majority of markets," said Bjorn Hanson, Ph.D, global industry leader, PricewaterhouseCoopers. "We do expect the travel industry to see a last-minute upward tick in demand due to heavy discounting and some consumers now regretting their initial decisions not to travel."

PricewaterhouseCoopers is the industry's leader in providing reliable lodging forecasts that offer true industry-wide samples based on solid econometric models. The group predicted every industry turning point in the last ten years.

In July 1991, PricewaterhouseCoopers predicted a return to profitability for the industry in 1993, and average daily room rates surpassing inflation. In April 1996, PricewaterhouseCoopers issued an early alert that there would be an occupancy decline in 1997. In October 1996, the firm predicted occupancies would decline in 1997. In September 1997, PricewaterhouseCoopers said room starts would decline in 1998. In November 1999, PricewaterhouseCoopers predicted that RevPAR growth would reach a trough in the current growth cycle in the first quarter of 2000.

The firm's research models have recently been refined and enhanced to improve the estimation of future room starts, to enable more precise estimation of the interactions between lodging statistics and the macroeconomy, and to provide reliable estimates of future lodging statistics of the U.S. at the industry segment, the regional, and the local market level.

PricewaterhouseCoopers acquired PKF Consulting Ltd. (Asia/Pacific) on July 26, 1999. The acquisition places PricewaterhouseCoopers in a leading position in the Asia market. The PKF acquisition incorporates PKF's extensive lodging database information and consulting services into PricewaterhouseCoopers' Asia practice. By retaining PKF's staff, PricewaterhouseCoopers has kept a team of consultants together who possess over 100 years of experience in the hospitality sector.

PricewaterhouseCoopers' has launched PwC Trends (formerly PKF Trends) a publication that examines lodging performance in 17 of Asia's most important markets.

PricewaterhouseCoopers Hospitality and Leisure Practice provides services including management, technology, human resources and financial consulting in North America, Europe, the Middle East, Africa and Asia. The group recently formed a partnership with Smith Travel Research.

PricewaterhouseCoopers (www.pwcglobal.com) is the world's leading professional services organization. Drawing on the knowledge and skills of 150,000 people in 150 countries, we help our clients solve complex business problems and measurably enhance their ability to build value, manage risk and improve performance. PricewaterhouseCoopers refers to the US firm of PricewaterhouseCoopers LLP and other members of the worldwide PricewaterhouseCoopers organization.