According to the March 2015 edition of PKF Hospitality Research’s (PKF-HR) Hotel Horizons, U.S. RevPAR will continue achieving strong growth in 2015 and 2016.
Additionally, the report reveals that RevPAR growth is starting to shift so that record-setting occupancy will yield an increase in ADR.
“In 2015, RevPAR growth will be achieved by healthy increases in both occupancy and ADR, similar to the pattern we have seen since 2011,” says R. Mark Woodworth, senior managing director of PKF-HR. “However, beginning in 2016, we are forecasting that ADR gains will be the dominant—if not sole—driver of RevPAR growth through 2019.”
PKF-HR predicts a 7.3 percent increase in RevPAR will be reached following a 1.9 percent increase in occupancy and a 5.3 percent rise in ADR.
In 2016, a 6.5 percent gain in RevPAR will be the net result of an occupancy rate of 0.6 percent and 6.3 percent ADR growth.
“The slowdown in the pace of real RevPAR growth next year might alarm some owners and operators,” says Woodworth. “However, it is important to note that the 3.6 percent real gain in ADR forecast for 2016 is still well above the real ADR gains we have observed over the past 20 years. Real ADR growth, combined with a limited increase in the variable expenses due to the slowdown in occupancy growth, should yield some very attractive improvements in [NOI] in 2016.”
