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STR: U.S. summer forecast calls for record hotel demand, low room rate growth

May 27, 2016 Hotel Trends No Comments Email Email

The U.S. hotel industry is projected to experience record-breaking room demand but low room rate growth during June through August 2016, according to summer forecast figures from STR.

The number of rooms sold during the summer months will increase year over year by roughly 2.1%. That growth will follow the current trend of record-breaking demand performance in the U.S.

However, a healthy supply pipeline that will likely lead to a 1.7% increase in the number of rooms available is expected to keep occupancy growth muted at 0.4%.

Additionally, hoteliers are not expected to increase prices at the same level as 2015.

“Average-daily-rate growth, while still positive, is certainly not as strong as we first expected,” said Jan Freitag, STR’s senior VP for lodging insights. “The ADR forecast for the summer currently stands at around +4%.  We expect that muted macroeconomic growth will have a small, positive impact on employment and corporate profit numbers. With that growth should be the desire for the American public to travel and for managers to send their people on the road.”

Freitag also noted that revenue-per-available-room growth was moderate in August 2015 (+1.8%), thus creating the opportunity for August 2016 to be comparatively stronger.  Overall, STR projects RevPAR to grow roughly 4.4% this summer.

STR’s revised 2016/2017 U.S. Forecast will be released on 6 June at the NYU International Hospitality Industry Investment Conference.

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