Economic Analysis of the Hotel Industry
Economic Analysis of the United States Hotel Industry
Background Information Our team chose the hotel industry in the United States for our economic analysis. The hotel business has existed since the earliest times, and has influenced the development of the economy since the founding of this country. According to the American Hotel and Lodging Association, in the year 1900, there were fewer than 10,000 hotels in the US which provided 750,000 to 850,000 rooms. The 2004 figures show that there are 47, 584 hotel properties in the US with 15 rooms or more. There are currently 4,415,696 guestrooms available. The industry had sales of $105.3 billion in 2003, which places average revenue per room at $50.42 with an average occupancy rate of 60.1%. The hotel industry is considered part of the tourism industry in the US. Currently, tourism is the 3rd largest retail industry in the US. Only the automotive and food industries are larger.
Recent Performance The hotel industry is currently experiencing a period of recovery following the events of September 11, 2001. The business and pleasure travel industry was impacted dramatically by the events on that September day. Hotel bookings in major cities fell as airline schedules were halted and the public adjusted to the new rules pertaining to air travel in the US. Many businesses cut back their travel planning and conducted business meetings via alternate methods. The economic slump in the country also helped to lower the occupancy rates at many of the major hotel chains throughout the country. However, even with these developments, over the past 10 years, the average room rate has risen from $60.53 in 1993 to $82.52 in 2003 (Smith Travel Research). In the last two years the hotel industry has seen a period of recovery in which currently demand is once again exceeding supply in some markets. The hotel industry pays $159 billion in travel related wages and salaries and currently employs 1.7 million hotel
Background Information Our team chose the hotel industry in the United States for our economic analysis. The hotel business has existed since the earliest times, and has influenced the development of the economy since the founding of this country. According to the American Hotel and Lodging Association, in the year 1900, there were fewer than 10,000 hotels in the US which provided 750,000 to 850,000 rooms. The 2004 figures show that there are 47, 584 hotel properties in the US with 15 rooms or more. There are currently 4,415,696 guestrooms available. The industry had sales of $105.3 billion in 2003, which places average revenue per room at $50.42 with an average occupancy rate of 60.1%. The hotel industry is considered part of the tourism industry in the US. Currently, tourism is the 3rd largest retail industry in the US. Only the automotive and food industries are larger.
Recent Performance The hotel industry is currently experiencing a period of recovery following the events of September 11, 2001. The business and pleasure travel industry was impacted dramatically by the events on that September day. Hotel bookings in major cities fell as airline schedules were halted and the public adjusted to the new rules pertaining to air travel in the US. Many businesses cut back their travel planning and conducted business meetings via alternate methods. The economic slump in the country also helped to lower the occupancy rates at many of the major hotel chains throughout the country. However, even with these developments, over the past 10 years, the average room rate has risen from $60.53 in 1993 to $82.52 in 2003 (Smith Travel Research). In the last two years the hotel industry has seen a period of recovery in which currently demand is once again exceeding supply in some markets. The hotel industry pays $159 billion in travel related wages and salaries and currently employs 1.7 million hotel