Record Hotel Occupancy Expected in 2015 & 2106

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Optimism is in the air in the hospitality industry. This year initiated with GMs and CEOs explaining their lofty expectations for the industry at the International Hotel Investment Forum in Berlin, which is now carrying over with predictions of solid industry progress from PKF Hospitality Research.

PKF-HR’s Hotel Horizons report predicts record-setting occupancy throughout 2015 and 2016, which will then make way for growing average daily rates (ADR). In 2015, PKF-HR forecasts a 1.9-percent improvement in occupancy, combined with a 5.3-percent rise in ADR, for a 7.3-percent boost to RevPAR. In 2016, the increase in occupancy is predicted to slow to 0.6 percent, while ADR could improve as high as 6.3 percent, causing a 6.5-percent gain in RevPAR. R. Mark Woodworth, senior managing director of PKF-HR, was quoted in the report saying that in 2016 “ADR gains will be the dominant or even sole, driver of RevPAR growth through 2019.”

“The 65.6 percent occupancy stage we are forecasting for 2015 is an all-time record for the 27 years STR, Inc. has been reporting U.S. lodging industry performance,” Woodworth said. “At such high-rise levels, it is natural that the pace of occupancy growth will slow down, and we will start to see prices take off.”

PKF-HR also determines gains upwards of 10 percent throughout both 2015 and 2016 for unit-level net operating income, showing the industry’s streak of double-digit increases in hotel profits could continue for six years.

Good news for the industry started pouring in this January after STR reported positive hotel metrics for ADR and occupancy early in the year. During the time, year-over-year measurements for the week of Jan. 4-10, 2015, STR found that the industry’s occupancy rose 1.0 percent to 49.9 percent.

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