Business travel boosts 2004 demand growth

Hotel & Motel Management, Feb 7, 2005

Q What has been the contribution of the recovery of business travel to demand growth between September 2003 and September 2004?

A According to PricewaterhouseCoopers' analysis of weekday and weekend travel data from Smith Travel Research and selected interviews, increases in business demand from September 2003 to September 2004 contributed to an additional 110,000 average daily room- nights sold in 2004, which is equivalent to an additional 2.2 percent demand growth in 2004. Without the revival in business demand, lodging demand growth would have been only 2.3 percent in 2004, instead of the estimated 4.5 percent.

[GRAPHICS OMITTED]

                               Sep-'04   Oct-'04   Nov-'04

U.S. lodging industry RevPAR
  (% change, previous year)      11.1%      9.2%      7.6%

Economic indicators
  (adjusted at annual rates)    1Q-'04    2Q-'04    3Q-'04

Real GDP                          4.2%      3.7%     4.30%

Industry indicators            Oct-'04   Nov-'04   Dec-'04

ISM Employment Index              55.8        55      52.7
ISM Production Index              59.8      61.3      56.9

Other indicators (% change)    Sep-'04   Oct-'04   Nov-'04

Nonresidential construction       0.3%      0.4%     -0.4%
Consumer Price Index              0.2%      0.6%      0.2%
Producer Price Index              0.1%      1.7%      0.5%

Sources: Smith Travel Research; U.S. Bureau of Economic Analysis;
U.S. Bureau of Labor Statistics; Institute for Management Supply;
University of Michigan; U.S. Department of Commerce.

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