According to CBRE Hotels’ Americas Research, the U.S. lodging industry is forecast to achieve another all-time record occupancy level in 2016, projecting a year end level of 65.7 percent, 20 basis points greater than the record level of occupancy achieved in 2015. The data was reported in the March to May 2016 edition of Hotel Horizons.
Despite the positive projections, a number of local markets are beginning to show the effects of growing competition. In 2015, only seven of the 59 markets studied by CBRE Hotels suffered a decline in occupancy, while in 2016, this number is expected to reach 29—and further increase to 38 by 2017. However, the U.S. economy continues to generate the need and desire for travel.
ADR will increase on a national level in excess of 5 percent both this year and next. Locally, 24 of the 59 Hotel Horizons markets will enjoy ADR growth in excess of 5 percent in both 2016 and 2017. Coupled with an anticipated rise in employment and the pace of inflation, which is expected to grow at 3 percent in 2016, the market for hotel rooms will remain robust.Â
On the down side, while an increase in both employment and inflation will benefit demand and pricing, such metrics also will put pressure on the amount hotels will have to pay for labor, goods, and services.
Hotels in New York and Miami are forecast to achieve occupancy levels of 83.8 percent and 76.8 percent respectively in 2016—but ADRs are expected to grow below national averages at 1.4 percent in New York, and 4 percent in Miami. A recent study by CBRE Hotels’ Americas Research found that the ratio of active Airbnb units to hotel rooms is greater than 10 percent in these cities.
To purchase the March – May 2016 edition of Hotel Horizons, please visit.Â
