The powerful forecasting panel that was assembled today for the Hunter Hotel Investment Conference in Atlanta was unified in its assertion that 2012 and 2013 will be very strong years for the hospitality industry nationwide.
Jan Freitag, Sr. VP of Smith Travel Research, stated that there has never before in history been as much demand – or as much supply – in the U.S. hospitality industry. It finished 2011 with an Average Daily Rate of $102 and RevPAR of $61. He says STR is predicting RevPAR gains for the industry of 4.3% in 2012, followed by gains of 4.9% in 2013.
Jim Hart, EVP of Travel Click, Inc. was even more optimistic. Travel Click looks at business actually booked forward into 2012, so their same-year predictions are often the most accurate in the industry. Mr. Hart said that Travel click predicts 2012 RevPAR growth of roughly double STR’s 4.3% forecast.
Mark Woodworth, President of PKF Consulting, added to this collective thinking that even if the markets received an oil shock from Iranian action in the Straits of Hormuz, and if Europe spun into a hard recession, the U.S. Hotel industry would still experience at least 2.5% RevPAR growth in 2012!
Freitag summed it up this way, “The smart money is building (hotels) right now. It’s just tough to find much smart money right now.”
I could not agree with him more. Very little new product is being built this year or next, and land and construction costs are lower than they have been in years. We are in a robust industry recovery that should continue for years. Indeed, the smart money is building hotels right now… Dave Hogg
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