The U.S. hotel industry is projected to experience continued performance growth through 2017, albeit at a slower rate, according to STR and Tourism Economics’ most recent forecast.
NASHVILLE, Tennessee—The U.S. hotel industry is projected to experience continued performance growth through 2017, albeit at a slower rate, according to STR and Tourism Economics’ most recent forecast released on Wednesday morning at the 2016 Hotel Data Conference.
For total-year 2016, the U.S. hotel industry is predicted to report flat occupancy at 65.5%, a 3.2% rise in average daily rate to US$124.12 and a 3.2% increase in revenue per available room to US$81.26.
“Rate will be the driver of RevPAR growth this year,” said Amanda Hite, STR’s president and CEO, during the conference’s opening general session.
On stage with Mark Woodworth (CBRE Hotels’ Americas Research) and Stephen Joyce (president and CEO of Choice Hotels International, Inc.), Hite pointed to several reasons for remaining optimistic in rate growth.
“We’re selling more rooms than ever before, we’re setting records, we’re not forecasting a recession,” Hite said.
Among the Chain Scale segments, the Independent segment is expected to see the largest year-over-year increases in occupancy (+0.4%) and RevPAR (+3.6%). In ADR, the largest increases are expected to come in the Economy (+3.3%) and Independent (+3.3%) segments.
Of the Top 25 Markets, 15 are expected to experience RevPAR performance between 0% and +5.0% for 2016. Six markets are expected to see RevPAR growth in the range of +5.0% to +10.0%: Dallas, Texas; Los Angeles/Long Beach, California; Nashville, Tennessee; Norfolk/Virginia Beach, Virginia; San Francisco/San Mateo, California; and Tampa/St. Petersburg, Florida.
Three markets are projected to see RevPAR performance between 0% and -5.0%. Houston, Texas, is the only market expected to report a RevPAR decline between -5.0% and -10.0%.
For 2017, STR and Tourism Economics project the U.S. hotel industry to report a slight decrease in occupancy (-0.3% to 65.2%) but increases in ADR (+3.1% to US$127.99) and RevPAR (+2.8% to US$83.51). Also in 2017, supply (+2.0) is expected to outpace demand (+1.6%) for the first time since 2009.
All but one Top 25 Market (Houston) is expected to report flat to growing RevPAR. The largest increases are expected to occur in Anaheim/Santa Ana, California; Detroit, Michigan; and Washington, D.C.-Maryland-Virginia.
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