Atlanta, GA, Dec. 12, 2011 – While many hoteliers are feeling angst and uncertainty caused by intimidating macroeconomic conditions, PKF Hospitality Research (PKF-HR) is assertively forecasting the continued recovery of the U.S. lodging industry.
How well you do in 2012, however, will vary depending upon the price of your room and where you are located.
According to the recently released December 2011 edition of Hotel Horizons®, PKF-HR forecasts that rooms revenue (RevPAR) for U.S. hotels will rise 8.1 percent in 2011, and increase another 6.1 percent in 2012.
“Analyzing the performance of U.S. hotels in 2010 and 2011, we have seen the progression of indicators that one would expect during an industry recovery. Occupancy levels increased in 2010, followed by real average daily rate (ADR) growth in 2011,” said R. Mark Woodworth (top right photo), president of PKF-HR. “The only surprise has been the pace and magnitude of the surge in hotel demand.”
Of greater importance is the future direction of lodging industry performance. “Looking forward, we are seeing familiar signs along the road to recovery. Owners and operators are now focused on more aggressive pricing policies, which in turn will translate into strong growth in hotel profits. We believe market conditions during the next few years will allow them to achieve these goals,” notes Woodworth.Hotel managers are eager to push room rates, but growth in ADR can have both positive and some offsetting consequences later,” warns John B. (Jack) Corgel (middle left photo)Ph.D., the Robert C. Baker Professor of Real Estate at the Cornell University School of Hotel Administration and senior advisor to PKF-HR. “We know that RevPAR driven by ADR is more profitable for hotels.
However, Economics 101 says that price increases ultimately reduce the demand for a product or service.”
PKR-HR is forecasting U.S. lodging demand to grow 2.0 percent in 2012. This is less than the annual growth rates observed in 2010 (+7.4 percent as reported by Smith Travel Research) and projected for 2011 (+4.8 percent).
“Industry participants should not be alarmed,” Corgel said. The pace of growth for indicators such as demand, occupancy, RevPAR, and net operating income will be slightly less in 2012 than they were in 2011. This does not mean the industry is slipping back into a recession. A deceleration in growth is to be expected at times during a recovery. The trajectory of performance is still on the rise, just not as steep.”
To purchase a December 2011 Hotel Horizon® report, please visit http://www.hotelhorizons.com/. Reports are available for each of 50 major metropolitan areas in the U.S., and contain five year projections of supply, demand, occupancy, ADR, and RevPAR.
To receive a complete copy of the company’s news release, please contact:
R. Mark Woodworth Chris Daly
PKF Hospitality Research Daly Gray Public Relations
Tel: 404 842 1150, ext 222 Tel: 703 435 6293
Email: mark.woodworth@pkfc.com Email: chris@dalygray.com
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