Basing its forecast on a recent briefing by the Center for Strategic and International Studies, PwC is offering three industry scenarios--one for a brief war and two others for more prolonged battles. The brief war scenario would entail four to six weeks of combat resulting in no disruption of oil supply and ending with the US occupation of Iraq. Under these circumstances, which are noted to be the "initial US consensus," PwC estimates RevPAR would decrease in the first half of '03 and return to baseline growth in the second half of the year, the report states.

Given this quick end to conflict, RevPAR is expected to increase by 0.5% in 2003. This is dependant on leisure travel recovering by the peak summer travel season and the end of geopolitical uncertainty boosting business travel and economic recovery. During the actual 30 to 45 days of war, however, lodging demand is expected to drop by 4.9% or 126,000 occupied rooms per night.

If the war efforts are prolonged, PwC anticipates a "worst case scenario" with RevPAR decreasing 3.6% this year. In the event of an "intermediate case," the firm projects a 0.1% decline in RevPAR.