After Cutting Costs, Hotels Welcome Back Guests; As economy rebounds, industry spruces up bedding while holding down expenses; occupancy, prices continue rising.(INDUSTRY SNAPSHOT)(HOTELS & MOTELS)

Publication: Investor's Business Daily

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COPYRIGHT 2005 Investor's Business Daily, Inc.

Byline: MARILYN ALVA

Battered for three years by a prolonged travel slump, the hotel industry is finally enjoying good times.

As the economy recovered last year and business travel budgets loosened up, hotel demand and occupancy levels shot up. What's more, customers were willing to pay more for rooms.

After three years of flat or declining rates, prices rose nearly 4% in 2004. They're expected to go up even more this year.

Higher room rates beget higher margins, as hotel chains happily note. "For every dollar you raise rates, about 90 cents falls to the bottom line," said Marc Grossman, senior vice president of corporate affairs for Hilton Hotels.

The industry took in $16.6 billion in profit last year, according to Price-waterhouseCoopers. That compares with $12.8 billion in 2003. The best year was in 2000, with $22.5 billion in profit.

1. Business

As the economy goes, so goes the lodging industry. But these days the industry is better able to weather downturns. The reason: It's gotten a lot better...

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