PwC also predicts that profit per available room will jump by 23 percent between 2004 and 2005 to reach $4,585. Another 18.6 percent jump is expected to bring profit per available room up to $5,440 in 2006.
The continuing trend of RevPAR increases and declining expenses also bodes well for the lodging sector. RevPAR (revenue per available room) is expected to grow by 7.3 percent in 2005 and 6.3 percent in 2006. Meanwhile, increased productivity is helping hoteliers cut their expenses. Productivity as measured by the number or employees per 100 rooms has declined from 67.8 employees in 2000 to 61.2 in 2004.
Interest expense as a percentage of total revenue has also fallen dramatically from 14.2 percent in 1990 to 3.5 percent in 2000. As of the end of 2004, interest expense as a percentage of total revenue stood at 3.9 percent.
