Strong Group Demand to Drive Rate Growth in 2015, Says PwC
The increased momentum of group demand in the third quarter will continue in the fourth quarter and into next year, according to the updated lodging forecast from hospitality consultants PwC US. That surge, together with continued strong performance in the transient travel sector, should drive an 8.2 percent growth in revenue per available room this year, followed by another 7.4 percent in 2015. The average daily rate is expected to rise significantly, by 4.7 percent this year and an additional 6.2 percent in 2015. The updated figures are noticeably higher than in PwC's previous forecast, issued in August, which called for a 5.7 percent hike in rate for 2015 and 6.9 percent RevPAR growth. Accelerated supply growth next year is expected to moderate occupancy increases, but even so, the forecasted 64.9 percent occupancy level would be the highest since 1984. PwC expects that level to hit 64.2 percent for 2014. Occupancy at lower-priced chain-scale segments should approach or exceed prior peaks, noted the forecast, as the rising rates should drive some demand to more economical options.