At the beginning of the year, STR and Tourism Economics projected growth in revenue per available room to slow from more than 8.0% in 2014 to 6.4% in 2015. Actual 2015 RevPAR growth reached 6.3%, just 10 basis points lower than the forecasted figure.
“In 2015, U.S. lodging performance followed our expectations toward a more sustainable pace of growth,” said Adam Sacks, president of Tourism Economics. “Our model indicated that a slowdown in RevPAR was nearly inevitable in the context of the overall cycle.”
The companies anticipated gradual acceleration of growth in average daily rate from 4.5% in 2014 to 5.2% in 2015. That optimistic projection was not met as ADR maintained a steady growth of 4.4%. Occupancy was projected to grow by 1.2% but surpassed the forecast with actual growth of 1.7%.
For Chain Scales, the largest differences between the STR/TE forecast and actual performance came in the Luxury and Upper Upscale segments, where RevPAR growth proved weaker than initially projected. In addition to weaker occupancy gains than anticipated, the Luxury and Upper Upscale segments experienced weaker ADR gains than any of the other segments. In terms of RevPAR performance in other segments, Upscale underperformed, the Upper Midscale and Economy segments performed largely as expected, and Midscale and Independent outperformed.
“STR’s forecasting process is powered by historical hotel performance data and Oxford Economics’ global, regional and city-level economic forecasts,” said Chad Church, STR’s VP of operations. “Using a combination of these data sets, the STR and Oxford Economics teams have built robust forecasting models that closely follow past movements in hotel performance. We then augment the forecast as necessary to account for special event impacts. Forecast accuracy is crucial as we want to provide our clients with the best tool to facilitate their business planning, risk management and budgeting processes.”