U.S Hotel Rates to Rise this Year

According to PricewaterhouseCoopers´ latest forecast, average daily rates (ADR) per occupied room at U.S. hotels will rise by 5.6 percent in the course of 2006. The percent increase is even larger than the 5.3 percent increase Smith Travel Research reported for 2005.

“Although the national average rate of increase of 5.6 percent is high, the increases in many cities, including New York, San Francisco, Honolulu, Boston and others, will be even higher, maybe 7 to more than 10 percent”, says Bjorn Hanson, Ph.D. and partner, PricewaterhouseCoopers Hospitality & Leisure practice. “Also, guests will see even larger increases during peak periods.”

The increase is a result of rapidly increasing occupancy, 1.7 occupancy points in 2005, and an additional 1 point increase PricewaterhouseCoopers forecasts for 2006, to 64.1 percent. Also hotel owners are recovering record levels of investment in renovations and enhancements, including improved beds, flat screen televisions, high speed internet connections and a long list of other enhancements.