“Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.”

TravelHaven News Brief – Hotel prices driven by lower supply, increasing demand

The business consulting service PricewaterhouseCoopers forecasts that new hotel room construction will not keep up with recovering demand in 2011. For travelers in many parts of the U.S. this means that rates are likely to increase in the coming years. With construction starts slowing, hotel supply growth is declining. This should bring the first increase in per-room revenue for the hotel industry since 2007, as economic conditions support increased travel demand by businesses and households. PwC predicts a 6.3 percent growth in 2011 for per-room revenue.

This is based on a sustainable recovery of lodging demand in the initial months of 2010. Businesses and consumers are gaining confidence in the strength of economic recovery, which has led to an upswing in discretionary spending. This should contribute to moderate but progressive increases in hotel occupancy levels into 2011. Lodging supply growth is anticipated to lag behind this growth in demand for the first time since 2006. Average room rates are expected to begin increasing in most U.S. markets early next year.

“Based on current macroeconomic conditions and the lodging industry’s performance during the first half of the year, PricewaterhouseCoopers continues to believe that the industry will continue to experience a modest recovery for the balance of this year into 2011,” PwC principal and U.S. hospitality and leisure leader Scott Berman said in a statement.