PwC US Lodging Forecast Predicts Continuing RevPAR Gains
By Kerry Medina
June 04, 2012 10:57 PM
Despite economic risks associated with a recovery and the European sovereign debt crisis, an updated lodging forecast released by PwC US anticipates revenue per available room (RevPAR) recovery in 2012 to remain intact, with stronger price gains anticipated in 2013.
As the U.S. economy has inched forward in 2012, travel activity in the U.S. has continued its robust recovery. Business and leisure travel posted solid gains in the first four months of 2012, and even the group segment -- one of the hardest hit areas of the lodging sector -- experienced an uptick in demand and bookings. As a result of continued recovery in demand, U.S. RevPAR is expected to increase by 6.5 percent in 2012 and 5.6 percent in 2013, building on the strong 8.2 percent increase in 2011.
According to PwC, the outlook for RevPAR recovery reflects continued momentum in business travel, including gains in corporate meetings, as well as leisure travel growth that includes greater volumes of international visitors. As a result, lodging demand in 2012 is expected to increase 2.5 percent, which combined with still restrained supply growth of 0.4 percent, is expected to boost occupancy levels to 61.3 percent, the highest since 2007.
Hotels across the spectrum of price segments experienced average daily rate (ADR) gains in the first quarter, reflecting the breadth of the industry recovery. Looking ahead, increased confidence from occupancy gains is expected to allow hotels to raise room rates, particularly in the higher-priced segments of the industry. As a result, ADR is expected to increase by 4.3 percent in 2012 and 4.8 percent in 2013. In May, PwC US predicted a steady recovery for the US hotel industry.