NEW YORK— While there might be some lag time, the overall hotel industry is expected to recover with the U.S. economy, according to Bjorn Hanson, global hospitality leader at PricewaterhouseCoopers (PwC). Using its 10-year econometric model, PwC has determined approximately 83% of the downturn in lodging demand can be explained by the nation’s slowing economy, rather than travel fears. This ultimately means that as the economy improves, so will lodging demand. However, don’t expect to see an instant correlation. Hanson noted that changes in lodging demand do not always occur in the same quarter as overall economic changes; in fact 30% occur in the subsequent quarter. For example, according to PwC, actual lodging demand decreased by 6.5% in the fourth quarter of 2001, and of that, 5.4% is directly attributed to the economy with only 1.2% attributed to non-economic concerns, such as travel safety and fear of flying related to terrorism. This contrasts to the third quarter of 2001, when actual lodging demand decreased by 6%. Of this decrease, 2.2% was due to the economy. The residual 3.8% was attributed to the aforementioned non-economic factors. Despite the reduction in travel fears from one quarter to the next, lodging demand continued to drop, partially because the economic impact of Sept. 11 was still being absorbed in the fourth quarter. “The economy got worse,” said Hanson, who was quick to note that while the economy plays a major role, the effects of travel fears should not be overlooked. While the fear of flying has decrease significantly in recent months— contributing to a 63% drop in lodging demand in the third quarter, but only 17% drop in the fourth quarter, “that still means that 17% of the decline in lodging demand is due to non-economic reasons,” said Hanson. “That’s still bad. Before September 11 that would have been 0%.” In addition, economic factors are particularly affecting business travelers, who are resuming their travel schedules at a slower pace than leisure travelers. “Pricing only stimulates demand on the leisure side,” said Hanson, noting that corporations less likely to be swayed by a 10% discount at hotels or airlines. “Leisure travelers are taking more advantage of travel deals.” —Diana M. Rodriguez