PKF Hospitality Research has projected that RevPAR for U.S. hotels will rise 7.2% in 2011, a more optimistic projection than its 6.9% forecast for RevPAR growth published in June.
PKF-HR’s forecasting model is based on historical lodging performance data from Smith Travel Research and economic projections from Moody’s Analytics. The model relies most heavily on Moody’s forecasts of total employment and real personal income to project hotel demand and ADR.
“Our reading of the economic tea leaves is that 91% of the people in the labor force have jobs, the unemployment rate among educated workers who make up a large share of the traveling public is less than 5% and employed workers are receiving real wage increases,” said Jack Corgel, the Robert C. Baker Professor of Real Estate at the Cornell University School of Hotel Administration and senior advisor to PKF-HR. “Total real personal income has already recovered and surpassed its historical peak. Moreover, corporate profits keep soaring to new highs, which add layers of confidence for spending on business travel.”
Among other highlights from PKF-HR’s most recent report:
- For 2011, PKF-HR is forecasting that lodging demand will rise 4.5%, while hotel supply is projected to increase just 0.6%. Looking towards 2012, PKF-HR is forecasting demand will rise another 3.1%, with just a 0.7% increase in room inventory.
- Occupancy for U.S. hotels is expected to increase from 57.6% in 2010 to 59.8% in 2011, and 61.2% in 2012.
- PKF-HR has upped its 2011 annual ADR growth forecast to 3.2%. However, based on the updated economic outlook and long-term pricing trends, PKF-HR has lowered its ADR growth forecast for 2012 to 4.8%.