NEW YORK— According to an analysis by PricewaterhouseCoopers (PwC)— released to clients March 4— 83% of the downturn in lodging demand is related to the slow economy rather than concerns about travel. This information seems all the more relevant given Alan Greenspans recent comments about the economy and the revised GDP 4Q growth rate. Actual lodging demand decreased by 6.5% in the fourth quarter of 2001, reported PwC. Of that decrease in demand, 5.4% is directly attributable to the economy, and only 1.2% is attributable to non-economic concerns, such as concerns about travel safety and fear of flying related to terrorism. Therefore the economy explains 83% of the decline in lodging demand. 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. The economic effects of September were incorporated into an overall slowdown in economic activity and it is the economy that explains most of the decrease in demands, not fear or even the increased inconvenience of travel, the study stated.
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