PricewaterhouseCoopers Quantifies Effect of Travel Concerns on Lodging Demand - Sector Expected to Remain Weak through Third Quarter of 2003

PwC econometric modeling indicates that the average daily loss in occupied room nights remains considerable, at 44,100 in the first quarter of 2002 and 31,300 in the second quarter. In comparison, average daily loss in room night sales in the quarter following September 11, 2001, was 92,000. On average, the year-to-date effect of travel concerns in 2002 has been a percentage point loss in daily room occupancy.

According to Bjorn Hanson, Ph.D., global industry leader, PricewaterhouseCoopers Hospitality & Leisure Practice, "though lodging demand picked up in some measure during the first half of 2002, actual demand remains weak and below what would be consistent with observed levels of U.S. economic activity."

PwC Reaffirms Estimates for Second Half of 2002

PricewaterhouseCoopers' Hospitality & Leisure Practice reaffirms its lodging demand forecasts for the second half of 2002, specifically estimating that lodging demand will remain weak through the third quarter of 2003. Estimated average daily loss in room night sales are expected to increase slightly to 54,000 in the third quarter of 2002 and 61,800 in the fourth quarter of 2002. This slight increase in the average daily loss appears consistent with heightened concerns surrounding the first year anniversary of the September 11 events and constant media coverage of Federal security alerts, potential terrorist activity, and possible military operations in Iraq.

PwC's next regularly scheduled forecast issuance will be in December of 2002.

Table: Occupancy Points and Average Daily Loss of U.S. Room Night Sales due to Travel Disruption and Traveler Concerns about Safety and Convenience of Travel following September 11, 2001.

    Quarter                 Average Daily Loss    Occupancy points
                               in U.S. Room
                                Night Sales

    3Q 2001 *                     65,900               - 1.6
    4Q 2001                       92,000               - 2.2
    1Q 2002                       44,100               - 1.1
    2Q 2002                       31,300               - 0.7
    3Q 2002 - estimate            54,000               - 1.3
    4Q 2002 - estimate            61,800               - 1.5

    * The effect was concentrated in the last 20 days of the quarter, during
      which the average daily loss in room night sales was 292,100.

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