U.S. hotels will see continued improvement in the industry’s fundamentals over the next three years, according to the March 2012 edition of Hotel Horizons from PKF Hospitality Research. For 2012, the firm forecasts a 5.8 percent increase in revPAR, 1.6 percent growth in occupancy, and a 4.1 percent gain in ADR.
“The metrics that owners, lenders, and other parties invested in hotel real estate monitor to understand the health of the industry remain positive,” says R. Mark Woodworth, president of PKF-HR. “Ever since the first quarter of 2010, growth in lodging demand has greatly exceeded the supply increase. We have seen six straight quarters of ADR growth and are confident forecasting a sustained period of attractive industry profit growth.”
What’s more, a limited amount of new hotel supply is projected to enter the market over the next five years. According Smith Travel Research (STR), the average annual change in the nation’s lodging supply from 1988 through 2011 was 2.1 percent. PKF-HR anticipates that new supply growth will remain below that level through 2016, less than 2.0 percent annually. With supply suppressed, PKF-HR forecasts annual occupancy gains through 2015.
