Hotel Demand Continues to Outpace Rate

Demand for U.S. hotel rooms continues to recover well, which should lead to a 4.9 percent demand increase for the year, forecasts PKF Hospitality Research in the June edition of Hotel Horizons. Room rate should post a more modest gain of 2.4 percent, according to the report, which was made public today. "We continue to be impressed by the pace at which travelers have returned to the road after the depths of the Great Recession," said R. Mark Woodworth, president of PKF-HR, in a statement. "Given the headwinds created by stagnant employment and continued weakness in the housing sector of the economy, it is somewhat surprising that hotel demand continues to bounce back as quickly as it has." Average daily room rate, however, remains sluggish, noted the report, due to competitive market conditions and adequate room supply. PKF expects rate to gain more traction in following years, predicting room costs to rise by 5.5 percent in 2012 and 5.8 percent in 2013.