Value Received by Hotel Customers in Past Decade

Averaged 86% at Full-service Hotels and 72% at Limited-service Hotels

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. October 14, 2008

NEW YORK, NY, April 3, 2007. Based on the cost of providing hotel products and services compared to the amounts paid by the guests, PricewaterhouseCoopers estimates that in the past decade, value received by customers has averaged approximately 86 percent at full-service hotels and 72 percent at limited-service hotels. Good value is considered to be 50 percent, which means the customer receives at least 50 percent more in value than the amount paid.

PricewaterhouseCoopers research and analysis was based on Smith Travel Research data. PricewaterhouseCoopers estimated the percentage value received by customers by estimating the ratio of "outputs" received by customers from the hotel in the form of cost of services to "inputs," which are the amounts paid for hotel services.

A major component of the high value in full-service hotels is food and beverage. Other components, which have contributed to increased value in full-service hotels include entertainment options and property maintenance and upkeep.

PricewaterhouseCoopers finds that amenities and services like communication and security have now become critical success factors for all hotels, regardless of the level of service, price or location.

"The purchasing power, effective real estate use, efficient use of employees, economies of scale and specialization of services create excellent value for consumers," says Bjorn Hanson, Ph.D., a principal in the Hospitality & Leisure practice of PricewaterhouseCoopers.