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War on Iraq to Hurt Travel, Hotel Industries: PwC Report

NEW YORK CITY-It might sound obvious, but analysts have officially predicted a negative impact on the hotel and travel industries resulting from the current war in Iraq. However, a turnaround may still be expected later this year, given the war ends quickly.

By Diana M. Rodriguez | Updated on March 21, 2003

NEW YORK CITY-With the increased terror alert to orange and the official start of Operation Iraqi Freedom, travel and hotel analysts from PricewaterhouseCoopers are projecting an immediate decrease in business travel and subsequent drop in hotel performance, according to a recent report. However, if the war ends swiftly, PwC predicts the industry would still rebound this year.

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.

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