Done Deals: PKF-HR Forecasts Broad-Based RevPAR Growth For All Segments of U.S. Lodging Industry

Friday, December 5, 2014

PKF-HR Forecasts Broad-Based RevPAR Growth For All Segments of U.S. Lodging Industry

R. Mark Woodworth

Atlanta, GA– All segments of the U.S. lodging industry will enjoy strong performance for the foreseeable future according to the recently released December 2014 edition of PKF Hospitality Research’s (PKF-HR) Hotel Horizons® (PKF-HR is a CBRE company).

Rising levels of employment, combined with increased geographic expansion of the national economic recovery, will result in revenue per available room (RevPAR) growth in excess of long-run averages for all hotel chain-scales, most location categories and the vast majority of markets from 2014 through 2017.

“No matter what hotel performance indicator you look at for any type of hotel, we foresee extremely favorable movements the next few years,” said R. Mark Woodworth, president of PKF-HR.

“Our firm is projecting demand growth to outpace changes in supply in the U.S. through 2016. That will result in industry wide occupancy levels at, or above, all-time record levels through 2017.

“With scarcity now a reality for consumers in many markets for a growing number of property types, hotel operators will have the leverage they need to drive room rates well above the pace of inflation,” Woodworth added.

“Real average daily room rate (ADR) growth driving RevPAR will contribute to a six year period of double-digit increases in hotel profits; something we have not seen in the 78 years PKF has been tracking the U.S. lodging industry.”

The December 2014 Hotel Horizons® report forecasts ADR to increase by an annual average of 5.4 percent from 2014 through 2017.

In turn, PKF-HR is forecasting unit-level net operating income to increase at an average annual rate of 11.8 percent during this same period.