U.S. Hotels Poised for Strong RevPAR Growth
Revenue per available room is likely to grow beyond long-run averages for all U.S. hotel chain scales, most location categories and the vast majority of markets for the next three years, according to PKF Hospitality Research. In the December 2014 edition of PKF-HR’s Hotel Horizons, the firm attributes the positive forecast to rising employment levels and expansion of the national economic recovery. "Our firm is projecting demand growth to outpace changes in supply in the U.S. through 2016," said R. Mark Woodworth, president of PKF-HR. "That will result in industry-wide occupancy levels at, or above, all-time record levels through 2017." Growing average daily rates could contribute to a six-year period of double-digit increases in hotel profits, added Woodworth, which would be a first in PKF’s 78 years of tracking the industry. In its December forecast, PKF predicts ADR will increase by an annual average of 5.4 percent from 2014 through 2017. For 2015, PKF-HR is forecasting a 5.7 percent increase in ADR and a 7.1 percent hike in RevPAR.