With 2012 almost behind us, 2013 is coming into focus. Here are some larger trends that will affect the hotel industry and impact revenue per available room.

More new supply
STR, parent company of HotelNewsNow.com, continues to report good (or great, in some markets) RevPAR data, and banks are lending again. The number of rooms in the pipeline is steadily increasing, and we expect to see new hotel openings throughout 2013, mostly in the limited- and select-service categories. A few markets are expected to add multiple new hotels, and their occupancies likely will suffer—New York probably being an exception again. New hotels will force existing hoteliers to rethink their price-value relationship. Unfortunately, in the past that has often meant more discounts. STR expects U.S. supply to grow 0.8% in 2013.
Property level RevPAR impact: Negative

More demand
We expect the disconnect between negative headline news and positive market-level RevPAR news to continue. Even though uncertainty from the election and the fiscal cliff surround the American economy, room demand broke records. We expect the rate of growth will slow in 2013, but hoteliers once again will sell more roomnights than ever before. STR expects U.S. demand to grow 1.2% in 2013.
Property level RevPAR impact: Positive

Less government travel
Unfortunately $14 muffins and junkets to Las Vegas have left a bad aftertaste in legislators’ mouths, and the headlines often paint government travel as frivolous and wasteful. The American Hotel & Lodging Association together with the U.S. Travel Association are waging a campaign to set the record straight, but in an environment of continued scrutiny, travel is an easy scapegoat and likely will be reduced further.
Property level RevPAR impact: Negative

More ADR growth
Stop me if you heard this one before: Increasing room demand in markets with limited new supply will lead to more compression nights and pricing power for hoteliers. STR expects U.S. ADR to grow 4.6% in 2013.
Property level RevPAR impact: Positive

Fewer resort fees
The Federal Trade Commission’s warning letter was clear: Disclose full prices including all fees, or we will make you. For too long some customers have not been able to see the full extent of their hotel charges up front, and the FTC is rightly putting a stop to this habit (technical term: drip pricing). It will be interesting to see if hoteliers will abandon the charges or, more likely in my opinion, increase their room rates. Get ready to see a lot more resorts advertising their prices “now without resort fees.”
Property level RevPAR impact: Positive

More agency model rooms
Customers can pay when they check out, hoteliers realize higher revenues and third-party intermediaries get a commission—just like in the good old days of travel agents. Everyone wins, right? Well, the Hotel Asset Managers Association and hotel owners across the land disagree. At the North American Hotel & Tourism Investment Conference I heard a rather forceful 15-minute monologue from a multi-unit owner who is now basically forced to pay higher fees to managers and brands just because the intermediaries moved their commission payments from before reporting revenues to below the revenue line. In effect, revenues are higher, but that implies higher fees to the other players involved even though they had nothing to do with the increase in revenues.
Property level RevPAR impact: Positive (but probably a negative net-operating-income impact)

Shorter wait times in US embassies
One way to increase local tax revenues and increase hotel revenues is to welcome foreign tourists. In the past, the increase in demand for visas also brought with it an increase in wait time to be interviewed and processed. The White House, together with U.S. Travel and a coalition of other trade associations, has made inbound travel a priority, and visa wait times have decreased while visa demand continues to climb. This is probably good news for all hoteliers but especially for those players in major markets with good international airlift.
Property level RevPAR impact: Positive

More natural disasters
This year will be the hottest year on record. Superstorm Sandy devastated parts of the East Coast and caused flight delays and cancellations, impacting hotel demand and property operations. At the same time, displaced people, electric utility crews and cleanup workers provided an unforeseen demand surge that partially made up for the loss of group and transient business. Given the impact of global warming on the U.S., with more drought conditions enabling wild fires and warming sea waters supporting hurricane formation, the U.S. hotel industry will be impacted as well, both negatively from canceled trips and positively as a refuge for those in need.
Property level RevPAR impact: Neutral

More mobile bookings
At the 2012 PhoCusWright convention, the three main topics, ranked in order of importance, were: 1) mobile 2) mobile and 3) mobile. Some travel startups are foregoing their website to go app-only, and all suppliers or intermediaries are devising the better mousetrap for the mobile device of choice, be it an app or a streamlined website. I would expect that, as the “fourth screen” becomes the preferred travel booking tool, intermediaries will ask hoteliers for even better deals to serve up hotel information to the mobile devices.
Property level RevPAR impact: Neutral to slightly negative

Less data
Our clients are clear: They want less data—but at the same time, they want more information. As hotels, brands, management companies, intermediaries and research companies such as STR collect more data points, the call for meaningful interpretation becomes ever louder. “Big data” is the trendy buzzword of 2012 and will likely lead to more computing and brain power being expended to make sense of the accumulated data riches. The winner will be who can serve up the best actionable information in the most user-friendly form to help hoteliers make better pricing decisions.
Property level RevPAR impact: Positive (hopefully!)

Dear reader: What do you think will be the biggest trends impacting the hotel industry in 2013? Please share your thoughts in the comments section below.

The opinions expressed in this blog do not necessarily reflect the opinions of HotelNewsNow.com or its parent company, STR and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.