Two companies - PKF Hospitality Research (PKF-HR) and TravelClick - are predicting that the North American hotel industry will ring in the New Year with strong revenues that will be sustained through 2015, according to PKF Hospitality Research (PKF-HR).
Its December edition of Hotel Horizons is reporting that revenue per available room (RevPAR) will rise 6.6 percent next year and by 7.5 percent in 2015. Hotel profits are expected to climb 12.8 percent next year and by 14.5 percent in 2015.
"As anticipated, RevPAR growth slowed down a bit in 2013 compared to the previous three years," said R. Mark Woodworth (pictured above), president of PKF-HR in a statement. "Entering the year, we knew fears of falling off the fiscal cliff would create uncertainty in the minds of potential travelers.
"As the year progressed, the sequester and government shutdown caused additional angst. However, despite the challenging economic environment, we observed above average growth in lodging demand, average daily rates (ADR), RevPAR and profits."
PKF-HR estimates that by year's end, hotel demand will rise by 2.1 percent. A projected 0.8 percent increase in supply will result in a 1.3 percent gain in occupancy. The 62.1 percent occupancy level estimated for the year shoots ahead of the 61.9 average percent reported by Smith Travel Research (STR).
"Our firm's forecast for nominal ADR growth in 2013 is 3.9 percent," said Woodworth. "Given the fact that occupancy levels have finally eclipsed the long-run average, some hoteliers were expecting even greater rate growth. Clearly this is the one measure that was impacted most by the economic uncertainty that characterized 2013."
PKF-HR's lodging forecasts are derived from Moody's Analytics economic projections. According to Moody's, 2014 is showing all the signs of being a "breakout year."
For its part, TravelClick said overall occupancy from November 2013 through October 2014 will be up 8.4 percent when compared to the same period last year. The company said ADR is up 3.5 percent based on reservations currently on the books.
"We are very encouraged by the numbers we are seeing so far for Q1 2014," said Tim Hart, executive vice president, business intelligence at TravelClick in a statement. "Both group and transient bookings are coming in significantly stronger than same time last year."
For the latest travel news, updates and deals, subscribe to the daily TravelPulse newsletter.
Topics From This Article to Explore
