NEW YORK Hotel industry profits in the U.S. will grow at the slowest rate this year since 1992, according to PricewaterhouseCoopers (PwC) hospitality group. The slowing economy is causing a decrease in gross national product growth, which PwC now estimates to grow 2.2%, as opposed to its original estimate in December of 2.8%. Companies like General Electric and Cisco Systems have already begun cutting travel budgets in order to compensate for any losses.
As previously reported by HOTEL BUSINESS., RevPAR growth is estimated at 2.8% this year, down from 5.5% growth last year. Companies like Host Marriott have begun taking provisions, like reducing overtime hours, in order to cope with slowing profits.
Marriott International has also reported that it will be “just shy” of its 3% -4% RevPAR goal.
In addition, PwC reports that New York City has been hit hard by decreasing business travel, where RevPAR growth fell to 5% in February 2001, as opposed to 10% during the same month last year. (3/19/01)