PKF-HR Forecasts Record Occupancy for 2015

Positive Market and Economic Conditions to Sustain Longest Period of Growth in 20 Years

September 3, 2014 - Atlanta, Georgia – The U.S. lodging industry will achieve 65 percent occupancy in 2015, the highest national occupancy rate since STR, Inc. began reporting data in 1987, according to the recently released September 2014 edition of PKF Hospitality Research’s (PKF-HR) Hotel Horizons®. (PKF-HR is a CBRE company.) By year-end 2015, PKF-HR projects that the demand for lodging accommodations will have increased 25.8 percent since the depths of the recession in 2009, while the supply of hotel rooms will have grown by just 5.6 percent.

An ever-improving economy, and the favorable relationship between supply and demand, have led to significant growth in both revenues and profits from 2009 to the current year. We expect this trend to continue through 2017,” said R. Mark Woodworth, president of PKF-HR. “The 1990s were the only other time we observed such a sustained confluence of positive economic and market conditions.”

With U.S. hotels achieving all-time high occupancy levels, PKF-HR believes that hoteliers will be able to increase their average daily rates (ADR) at an average annual pace of 5.7 percent from 2015 through 2017. Concurrently, Moody’s Analytics, PKF-HR’s source for economic projections, is forecasting the annual pace of inflation to average just 2.5 percent.

“The best news for U.S. hotel owners and investors is that the combination of high occupancy levels and significant real ADR growth will perpetuate strong bottom-line gains. PKF-HR is projecting the current three year streak of double-digit gains in net operating income (NOI) to continue through 2016,” Woodworth noted. “We have not seen six years of such strong and sustained profit growth in the 78 years PKF has been tracking the U.S. lodging industry.”

 
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