NEW YORK— UBS Securities LLC is forecasting 7.5% U.S. RevPAR growth in 2006 based on lodging room revenue growth of 9.1% and 1.5% in supply growth (duly subtracted; the additional reduction of 0.1% is the multiplication of the two growth rates). Year-to-date through July 2005, U.S. RevPAR has increased 7.6%, according to UBS. The company noted offsetting the anticipated economic slowdown (particularly from housing starts) is the continued rise in capacity-utilization rates, which are anticipated to rise from 79.9% in 2005 to 81.9% in 2006. It added because most lodging C-corporations (the non-REITs) are categorized as “consumer discretionary,” they have come under selling pressure on the concern over the slowdown in the economy and lower discretionary income after accounting for higher fuel prices.
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