NEW YORK— From a global perspective, it’s not a pretty picture for lodging for the first-half of 2002, according to PricewaterhouseCoopers, which reported significant, if not severe, declines in fourth-quarter RevPAR in key destination cities worldwide. Analysis by PwC’s Hospitality and Leisure Practice indicates Asia Pacific, the Americas, and Europe, Middle East and Africa (EMEA) are not expected to make a “full recovery” from compounded conditions, notably a dragging global economy and the constriction of travel post-Sept. 11, much in advance of third quarter 2002. Sparking improvements in third and fourth quarter, according to Bjorn Hanson, PwC’s Global Hospitality and Leisure chairman, will be increased production in industrial and consumer goods starting in second quarter. “Businesses are going to start to say— even with things slow— we have to have inventory, we can’t have sales and revenues if we don’t have inventory. So we’ll start to see during the second quarter, the planning and gearing up of production, and that causes the first wave of economic strength where it’s been most weak, and that’s been business,” Hanson told HOTEL BUSINESS®. Barring any further actions against western interests, he added, there also should be an increase in leisure travel. “Americans haven’t totally— but you could say without a lot of exaggeration— Americans have stopped traveling to Europe, and to the extent that starts to return, that will also help the European economies,” said Hanson. A sampling of RevPAR declines year-over-year in fourth quarter shows the depth from which the markets must climb in the year ahead. For example, Frankfurt, Hong Kong, Singapore and Mexico City showed a 15% drop; Tokyo, -20%; Paris, -25%; London and Sydney down 30%; New York, -35%; and San Francisco, -40%. Indeed, the report noted there has never been a consecutive five-month period (Sept. 2001-Jan. 2002) of “synchronous global lodging downturn of this magnitude.” As might be expected, those destinations less dependent on air arrivals are anticipated to have a faster, more robust recovery, while major gateway business cities and resort destinations will have a longer recovery. However, by 2003 Asia Pacific, the Americas, and EMEA should see a quickening of recovery, PwC predicted.
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