PKF-HR: Fiscal Cliff Could Impact Lodging Sector

PKF-HR: Fiscal Cliff Could Impact Lodging Sector The U.S. lodging sector has a bright future ahead of it, according to a new forecast by Atlanta-based PKF Hospitality Research LLC (PKF-HR). However, the forecast adds that the sector will first need to get past a potentially rocky 2013.

PKF-HR notes that the lodging sector enjoyed an ‘extremely healthy upward trend’ beginning in the second quarter of 2010, with ongoing gains in all the major business measurements: lodging demand, occupancy, average daily rate and revenue per available room. Looking forward, the company is forecasting a perpetuation of this growth through 2016.

‘Despite all these positives, there is a pall on lodging industry participants induced by the federal budget negotiations,’ says R. Mark Woodworth, president of PKF-HR. ‘Hoteliers are eager to begin enjoying what appears to be a four-year period of sustained high levels of prosperity. Unfortunately, there is so much uncertainty surrounding 2013 that almost no one overtly is showing the optimism that should exist.

‘Without falling off the fiscal cliff,’ Woodworth continues, ‘we believe revenue per available room in 2013 will increase by six percent. However, if budget negotiations fail, it can be assumed that growth will be well below that. The good news is that under most every economic scenario, 2014 is shaping up to be a year of strong gains in both occupancy and average daily rate. Beyond 2014, without any meaningful new supply additions in sight, we should see record profitability.’


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