U.S. Hotel Industry Outlook

Continued Performance Increases Through 2016 Projected for U.S. Hotel Industry

For the remainder of 2015, the U.S. hotel industry is predicted to report a 1.4-percent increase in occupancy to 65.3 percent, a 5.2-percent rise in average daily rate to US$120.93 and a 6.6-percent increase in revenue per available room to US$78.99. During that same period, demand growth (+2.6 percent) is expected to outweigh supply growth (+1.3 percent).

STR

The U.S. hotel industry is projected to experience continued performance increases through 2016, according to STR and Tourism Economics’ most recent forecast released at the NYU International Hospitality Industry Investment Conference on Monday.

For the remainder of 2015, the U.S. hotel industry is predicted to report a 1.4-percent increase in occupancy to 65.3 percent, a 5.2-percent rise in average daily rate to US$120.93 and a 6.6-percent increase in revenue per available room to US$78.99. During that same period, demand growth (+2.6 percent) is expected to outweigh supply growth (+1.3 percent).

“All of the key performance indicators are at record highs, and barring a black swan event that jars the global economy, we don’t expect any dramatic changes during the foreseeable future,” said Amanda Hite, STR’s president and COO.

Among the Chain Scale segments in the U.S., Upper Midscale is expected to report the largest increase in occupancy (+1.9 percent) during 2015; Luxury is projected to see the greatest rise in ADR (+5.5 percent); and Upper Midscale and Economy are expected to report the highest increase in RevPAR (+7.1 percent).

When looking at the Top 25 Markets, 20 are expected to experience RevPAR increases of 5.0 percent or higher during 2015. Three of those markets are expected to see RevPAR growth in the range of 10.0 percent to 15.0 percent: Denver, Colorado; Phoenix, Arizona; and Tampa/St. Petersburg, Florida.

Outlook

 

2015 Forecast

2016 Forecast

Supply

+1.3%

+1.4%

Demand

+2.6%

+2.2%

Occupancy

+1.4%

+0.8%

ADR

+5.2%

+5.0%

RevPAR

+6.6%

+5.8%

Source: STR, Inc./Tourism Economics

For 2016, STR projects the U.S. hotel industry to post a 0.8-percent increase in occupancy to 65.8 percent, a 5.0-percent rise in ADR to US$126.94 and a 5.8-percent increase in RevPAR to US$83.56.

Also in 2016, demand growth (+2.2 percent) is once again expected to be higher than supply growth (+1.4 percent). Demand growth in the U.S. has outpaced supply growth for each of the past five years dating back to 2010.

All but five of the Top 25 Markets are expected to post RevPAR increases between 5.0 percent and 10.0 percent in 2016.

“There is certainly varied performance across markets in the U.S. because the hotel industry is a street corner business,” Hite said. “As an industry, we continue to experience some of the best fundamentals we have ever seen, and we expect to see steady growth for hotels during the next two years.”

About STR

STR, Inc. provides clients —including hotel operators, developers, financiers, analysts and suppliers to the hotel industry—access to hotel research with regular and custom reports covering the United States, Canada, Mexico and Caribbean. STR provides a single source of global hotel data covering daily and monthly performance data, forecasts, annual profitability, pipeline and census information. STR founded the STR family of companies and is proudly associated with STR Global, STR Analytics and Hotel News Now. STR also founded the Hotel Data Conference. For more information, please visit www.str.com.

 

About Tourism Economics

Tourism Economics, headquartered in Philadelphia, is an Oxford Economics company dedicated to providing high value, robust, and relevant analyses of the tourism sector that reflects the dynamics of local and global economies. By combining quantitative methods with industry knowledge, Tourism Economics designs custom market assessments, forecasting models, policy analysis and economic impact studies.  



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