US hotel industry on track to profitable new year
The US hotel industry is likely to continue enjoying higher profits for at least a few more years, industry leaders told Reuters.
The industry has made a stellar comeback since bottoming out about five years ago, with occupancy and room rates rising sharply nationwide, adds The New York Times.
Analysts expect another strong year in 2007, though they caution that the opening of hotels planned when the industry began its expansion may cool off.
“I see nothing on the horizon that would slow it down,” Bill Marriott, chairman and chief executive of Marriott International Inc. said at a lodging industry conference.
He cited low U.S. unemployment, a strong global economy and tamer oil prices as factors underlying his estimate that the sector in is the “early to middle stages” of its typical economic cycle.
Occupancy in the US lodging industry last year was 63.4%, up 0.5% versus 2005 according to Smith Travel Research.
Average room rate increased 7% to $97.31 and revenue per available room (RevPAR) – the combination of occupancy and average room rate and a key industry productivity measure – gained 7.5% to $61.69.
”The US lodging industry turned in another strong performance in 2006,” said Mark Lomanno, president of Smith.
Report by David Wilkening
David
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