All segments of the U.S. lodging industry will show strong performance in the foreseeable future according to the December 2014 edition of PKF Hospitality Research’s (PKF-HR) Hotel Horizons report.
Rising levels of employment combined with increased geographic expansion of the national economic recovery, will result in RevPAR growth in excess of long-run averages for all hotel chain scales, most location categories, and the vast majority of markets from 2014 through 2017. PKF-HR is also forecasting unit-level net operating income to increase at an average annual rate of 11.8 percent during this same period.
“No matter what hotel performance indicator you look at for any type of hotel, we foresee extremely favorable movements the next few years,” says R. Mark Woodworth, president of PKF-HR. “Our firm is projecting demand growth to outpace changes in supply in the U.S. through 2016. That will result in industry wide occupancy levels at or above all-time record levels through 2017.”
Previous research conducted by PKF-HR found that changes in employment have the greatest impact on the performance of hotels in the lower-priced chain scales, while changes in income influence the demand for upper-priced lodging facilities. The world oil market dynamics are also generating prices for transportation fuel that work to the benefit of travelers. If low energy prices are sustained, 2015 hotel performance will be better than expected.
