PKF Hospitality Predicts Revenue Growth for U.S. Hotels
By Brian Major
December 13, 2011 10:12 PM
Revenue per available room (RevPAR) for U.S. hotel properties will increase 8.1 percent in 2011, and another 6.1 percent in 2012, according to travel research firm PKF Hospitality Research (PKF-HR). PKF-HR is also forecasting U.S. lodging demand to grow 2 percent in 2012, below the annual growth rates observed in 2010 (7.4 percent as reported by Smith Travel Research) and projected for 2011 (4.8 percent).
“With national occupancy levels approaching their long-term average, and no meaningful new hotel supply additions in the foreseeable future, it is not a surprise that the pace of ADR (average daily rate) growth is forecast to accelerate,” said R. Mark Woodworth, PKF-HR’s president. The company is projecting the ADR for all U.S. hotels to increase 4.7 percent in 2012 and 5.3 percent in 2013. The long-term annual average for ADR growth is 2.8 percent.
“Analyzing the performance of U.S. hotels in 2010 and 2011, we have seen the progression of indicators that one would expect during an industry recovery” said Woodworth. “Occupancy levels increased in 2010, followed by real average daily rate growth in 2011. The only surprise has been the pace and magnitude of the surge in hotel demand.” Calling the room revenue performance “uneven” depending on the location of the hotel or property, Woodworth noted that, “in 49 of the 50 markets, upper-tier hotels have passed their previous peak levels of accommodated demand, but lower-tier hotels have reached the same milestone in only 16 cities.”
“Hotels operating in the upper-tier (luxury, upper-upscale, upscale) segments are all forecast to achieve occupancies above 70 percent in both 2012 and 2013, which will exceed their long-term average occupancy levels,” he said. “Conversely, hotels in the lower-priced chain-scales will continue to achieve occupancy levels below their long-term average through 2013.”