PwC has revised its 2013 U.S. lodging forecast based on promising numbers from Q4 2012. The research firm now expects revenue per available room (RevPAR) to grow 5.9 percent this year, representing the fourth year of hotel recovery.
The last six months of 2013 promise to be better than the first. The December outlook from Macroeconomic Advisers anticipates slightly weaker economic growth in the first half of 2013, reflecting ongoing fiscal contraction and policy wrangling, uncertainty regarding the Eurozone crisis, and still-impaired bank and household balance sheets, followed by stronger economic growth in the second half of the year.
PwC projects that lodging demand in 2013 will increase 1.8 percent, which combined with still restrained supply growth of 0.8 percent is anticipated to boost occupancy levels to 62.0 percent, the highest since 2007. Hotels in the higher-priced segments are expected to experience the strongest gains. Occupancy levels at hotels in the luxury, upper-upscale, and upscale segments have already exceeded pre-recession peaks. As stronger business transient and group activity returns to higher-priced hotels, revenue management initiatives are anticipated to drive increased pricing of available hotel rooms, resulting in a continuation of meaningful RevPAR gains. Hotels in the lower-priced segments have not experienced as solid of a recovery in occupancy but are still expected to realize increased room rates as demand gradually strengthens.
