by Michael J. Shapiro | August 27, 2014
Significant gains in group business, along with a strong second quarter, will drive occupancy levels to 20-year-highs by next year, according to the latest forecast from PricewaterhouseCoopers U.S. The steady gains in the leisure and business transient segments are continuing trends, according to the report, but the growth in group business is particularly welcome by hoteliers. Having lagged behind transient during the initial stages of lodging recovery, group business still has more room to recover to its peak levels. The PwC forecast is calling for 64.1 percent occupancy for 2014, followed by 64.8 percent in 2015 — the highest industrywide level since 1995. Average daily rate is expected to increase by 4.4 percent this year, followed by a significant 5.7 percent hike in 2015. Hotels are expected to realize particularly strong growth of 7.6 percent in revenue per available room in 2014, followed by another 6.9 percent in 2015. "The strengthening of the group segment thus far in 2014 and a strong summer travel season across all price points are encouraging for future occupancy levels and continued industry growth,” said Scott D. Berman, principal and U.S. industry leader, hospitality and leisure, for PwC. “We will be closely monitoring the industry's third-quarter results to evaluate any change in momentum.”