Led by Mid-Scale without Food and Beverage and Upscale Segments, Forecasts PricewaterhouseCoopers
Based on Smith Travel Research's historical data and PricewaterhouseCoopers' (PwC) econometric model, PwC forecasts that the mid-scale without food and beverage and upscale chain scale segments will lead the U.S. lodging industry's supply growth of 1.6 percent in 2007, with 3.6 percent and 3.5 percent supply growth, respectively. In 2006, the luxury segment led the supply growth.
The mid-scale without food and beverage segment will lead all other segments in average supply growth through 2007, followed by the upscale and luxury segments. While upper-upscale segment and economy segments' supply is expected to grow by 2.2 percent and 0.2 percent, respectively, in 2007, mid-scale with food and beverage segment's supply is expected to decline by 2.0 percent.
According to Smith Travel Research, supply increased by 0.6 percent in 2006. PricewaterhouseCoopers estimates that supply will increase by 1.6 percent in 2007, a 2.7-fold increase.
The following table summarizes the PwC forecast of supply growth of the chain-scale segments in 2006 and 2007.
"Although the total increase in supply is dramatic, an increase of 1.6 percent is still below the long term average of 2.2 percent, and the upscale and mid-scale without food and beverage are the segments with the fastest demand growth," says Bjorn Hanson, Ph.D., principal with PricewaterhouseCoopers' Hospitality & Leisure group.
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