by Michael J. Shapiro | March 26, 2014
The U.S. hotel occupancy rate will recover to pre-recession levels this year, according to the March 2014 Hotel Horizons forecast report issued by PKF Hospitality Research, and it should continue to grow through 2015. Combine rate increases with the record levels of demand seen over the past two years, and many in the lodging industry now are worried the result could be a glut of new projects, the report notes. "Anyone who was around in the 1980s and 1990s remembers the dramatic negative impact overdevelopment can have on the lodging industry," said PKF-HR president R. Mark Woodworth with respect to the latest report. "Fortunately, we see a different scenario evolving during the current property cycle." The analysts at PKF-HR don't expect supply growth to exceed the long-term average of 2.0 percent until 2017, and the forecast for the next three years is for new room counts well below the average in past expansions. Partially responsible is the relatively slow climb in average daily rate when adjusted for inflation; taking that into account, real ADR won't reach pre-recession levels until after 2015. Still, solid increases in rate are expected, in part due to the slow-growing supply: PKF-HR predicts ADR to grow by 4.9 percent this year and another 5.7 percent in 2015. The March 2014 Hotel Horizons report can be purchased at