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Preview 2014: Hotels

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January 6, 2014

Preview 2014: Hotels

Holiday Inn? Hotel for BrooklynWhen it comes to prognosticating about the U.S. lodging industry in 2014, analysts are no longer fence-sitting — and, much to the delight of prospective hotel developers, neither are bankers.

Granted, the year ahead could hold unavoidable risks. Speaking at the STR Data Conference in Nashville in September, PKF Hospitality President Mark Woodworth ticked off a number of factors that could end the positive momentum in both room and occupancy rates for the U.S. lodging industry: a demand shock, a jump in energy prices, another housing bubble and overbuilding hotels.

Fortunately, he didn’t think any of those bombs were likely to fall.

“We think there are really no threats historically to what’s caused the end to the good times,” Woodworth said.

Indeed, despite a still-tepid U.S. economy, budget sequestration, a partial government shutdown and attempts by some members of Congress to curtail government travel, revenue per available room (RevPAR) continued to advance steadily.

That kind of growth in the face of such major headwinds left analysts little reason to restrain their predictions.

For example, PricewaterhouseCoopers (PwC) called for 2014 RevPAR growth of 5.9%. While that was down from PwC’s previous forecast of 6.2%, it also represented slight acceleration from the 5.6% growth rate forecast for this year. PwC pegged 2014 occupancy at 62.9%, up from 62.2% this year and the highest since 2006’s 63.2%. PwC also said room rates would advance about 5% next year, to $116.47.

Meanwhile, STR predicted RevPAR growth of 6% in 2014, climbing from 5.7% this year. And while demand growth in recent years has been of the top-heavy variety, led by the luxury sector, 2014 should see the playing field even out, as almost every sector, from luxury to economy, will see RevPAR growth in the 5% to 7% range, both companies say.

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Source Travel Weekly,

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