Hotel Industry to Post Modest Gains in 2012 and 2013

Hotel data provider STR is calling for modest gains in the U.S. lodging market this year and next, according to its updated forecast. For 2012, STR expects the industry to end the year with a 2.1 percent increase in occupancy, to 61.2 percent; a 4.4 percent gain in average daily rate, to $106.15; and a revenue per available room surge of 6.5 percent, to $65.01. The forecast calls for the demand increase to continue to outpace that of supply, by 2.6 percent compared to 0.5 percent. The record levels of demand should stabilize for the remainder of this year and next, according to STR. "The developing story line is that industrywide, RevPARs will be driven by rate growth over the next two to three years," said STR president Amanda Hite. "We anticipate room rates to reach 2008 levels, not factoring for inflation." Occupancy will level out more for 2013, according to the extended forecast, increasing by just 0.3 percent. Average daily rate is expected to rise by 4.6 percent in 2013, and RevPAR to grow by 4.9 percent. The 2013 forecast predicts supply to increase by 0.9 percent and demand to slow to a 1.2 percent increase.