Forecast: U.S. hotel demand continues to rise
The U.S. hotel market expects to finish the year strong and that demand should carry over to 2015, according to the latest forecast from STR Inc. and Tourism Economics.
On the heels of 4.5 percent demand growth in the second quarter, the expectation is that hotel demand will be up 3.6 percent for the full year, said STR, a Tennessee-based hotel consulting and research firm.
Coupled with a continued lack of new hotel openings, that should result in a projected occupancy increase of 2.6 percent to 63.8 percent, according to the forecast.
“It is a great sign for the industry that group bookings have returned and are now complementing the already very strong transient room demand,” said Jan Freitag, senior vice president of strategic development at STR. “We expect pricing power to remain firmly in operators’ hands.”
Average daily rate is expected to increase 4.2 percent to $115.02 this year, while revenue per available room is projected to grow by 6.9 percent to $73.37, according to the forecast.
“Strong RevPAR growth of just under 7 percent is a little unexpected during this part of the cycle, but points to a very robust demand growth from business and leisure travelers alike,” Freitag said.
In 2015, STR and Tourism Economics predict occupancy to rise 0.7 percent to 64.2 percent, ADR to increase 4.4 percent to $120.13 and RevPAR to grow 5.2 percent to $77.17.
Demand is expected to increase 2.1 percent, while supply could increase 1.3 percent in 2015.
“We predict hoteliers will see positive results over the next 24 to 36 months,” said Amanda Hite, president and COO of STR.