MIAMI While U.S. lodging fundamentals are generally strong, increasing economic trepidation may begin to affect lodging industry performance, as the Consumer Confidence Index has begun to soften due to high oil prices and a volatile/declining stock market according to Ernst & Youngs 2001 National Lodging Forecast. If corporate and leisure travel expenditures begin to moderate as a result, the impact on hotel occupancy levels would be partially tempered by a development pipeline already thinned by the tight capital markets, according to the E&Y Forecast.
The financial community is taking an extremely cautious stance with respect to lodging investments, further inhibiting transaction activity. E&Y predicts that occupancy growth will be flat to slightly negative while both ADR and RevPAR growth will be flat to positive. Issues that E&Y believes will be important for the lodging industry this year include the Internet and web enablement; management company selection; brand and customer extension; asset management; consolidation and the aging of the baby boomer generation. (1/17/01)