The U.S. lodging industry is forecast to continue to achieve strong gains in both revenue and profits this year, according to the data released by Washington, D.C.-based PKF Hospitality Research LLC (PKF-HR).
PKF-HR is projecting that U.S. hotels will enjoy a 6.1% increase in revenue per available room (RevPAR) for the year, along with a 10.2% boost on the bottom line net operating income. PKF-HR acknowledges that while the forecasted 6.1% pace of RevPAR growth is less than the 6.8% increase achieved in 2012, this year's growth rate is more than double the long-run average of 2.9%.
‘In several segments and cities, hotels are at the point when it may be more profitable to sacrifice a few points of occupancy in favor of raising room rates,’ says R. Mark Woodworth, president of PKF-HR. ‘Occupancy rates for luxury, upper-upscale and upscale hotels are forecast to be in excess of 70 percent from 2013 through 2017, and 15 of the 50 major U.S. markets that we track have already reached their pre-recession peak levels of occupancy.Â Lofty occupancy levels limit the potential for demand growth, but the scarcity of available rooms provides management with the leverage needed to increase prices.’