The U.S. hotel industry is projected to experience continued performance increases through 2016, according to STR and Tourism Economics’ most recent forecast released at the NYU International Hospitality Industry Investment Conference on Monday.For the remainder of 2015, the U.S. hotel industry is predicted to report a 1.4-percent increase in occupancy to 65.3 percent, a 5.2-percent rise in average daily rate to US$120.93 and a 6.6-percent increase in revenue per available room to US$78.99. During that same period, demand growth (+2.6 percent) is expected to outweigh supply growth (+1.3 percent).
“All of the key performance indicators are at record highs, and barring a black swan event that jars the global economy, we don’t expect any dramatic changes during the foreseeable future,” said Amanda Hite, STR’s president and COO.
Among the Chain Scale segments in the U.S., Upper Midscale is expected to report the largest increase in occupancy (+1.9 percent) during 2015; Luxury is projected to see the greatest rise in ADR (+5.5 percent); and Upper Midscale and Economy are expected to report the highest increase in RevPAR (+7.1 percent).
When looking at the Top 25 Markets, 20 are expected to experience RevPAR increases of 5.0 percent or higher during 2015. Three of those markets are expected to see RevPAR growth in the range of 10.0 percent to 15.0 percent: Denver, Colorado; Phoenix, Arizona; and Tampa/St. Petersburg, Florida.
For 2016, STR projects the U.S. hotel industry to post a 0.8-percent increase in occupancy to 65.8 percent, a 5.0-percent rise in ADR to US$126.94 and a 5.8-percent increase in RevPAR to US$83.56.
Also in 2016, demand growth (+2.2 percent) is once again expected to be higher than supply growth (+1.4 percent). Demand growth in the U.S. has outpaced supply growth for each of the past five years dating back to 2010.
All but five of the Top 25 Markets are expected to post RevPAR increases between 5.0 percent and 10.0 percent in 2016.
“There is certainly varied performance across markets in the U.S. because the hotel industry is a street corner business,” Hite said. “As an industry, we continue to experience some of the best fundamentals we have ever seen, and we expect to see steady growth for hotels during the next two years.”