What's more, the professional services/consulting organization, anticipates occupancy will slip to 62.9%, and RevPar will grow by only 2.8%, slightly above the rate of inflation. "Even with the US economy's performance, we believe the lodging industry will experience profit growth in 2001, but that growth of 4.6% to $25 billion will be the smallest since 1992," says Bjorn Hanson of PricewaterhouseCoopers' hospitality and leisure practice. "The industry is currently operating at a substantial premium to break-even occupancy with high profit margins following a decade of restructuring," he adds.

For 2002, the outlook is more sanguine. RevPAR should increase by 4.3% and room demand growth is expected to recover at 2.7%, with average daily rates increasing by 3.9%. Occupancy is forecast to improve just slightly, however, by 0.2%.