PKF Hospitality Research Unveils Bright Forecast for Hotel Industry

PKF Hospitality Research is predicting the rosiest picture of the hotel industry since 2007 in its September 2013 edition of Hotel Horizons. “It is very rare for us to say we have no concerns about the near-term outlook for the U.S. lodging industry, but that is what we see from our econometric models, as well as discussions with our clients,” R. Mark Woodworth, president of PKF-HR, said in a statement. “If you look at the factors that historically have derailed the good times for hotel profit growth, very few, if any, exist today.”

PKF-HR is predicting a 5.9 percent rise in RevPAR in 2013, 7.2 percent in 2014 and 8.1 percent in 2015. Occupancy for this year is predicted to rise 1.6 percent with ADR increasing by 4.2 percent. Next year occupancy is expected to rise by another 1.9 percent, with ADR increasing by 5.2 percent.

On a less optimistic note, occupancy at lower-priced properties remain “suppressed” compared to the numbers of the mid-1990s, which results in higher-priced hotels not being able to raise their rates.

According to STR, from 2010 to 2012, higher-priced room rates rose 7.5 percent while lower-priced properties saw only a 3.2 percent increase in ADR.

“Given the strength of the fundamental measures of industry performance and underlying economics, many hoteliers have been disappointed with the pace of ADR growth during the recovery,” Woodworth said. “While we understand the reasons for their concern, further investigation reveals that their worries may be overstated. Measured in real terms, ADR has been growing roughly two percentage points in excess of the pace of inflation in recent years.”

… Adapted by Dave Hogg from a September 04, 2013 HotelNewsNow article by Claudette Covey

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