April 6, 2010
Hotel Palomar Chicago, opened March 2010
According to PKF Hospitality Research, market conditions in the US lodging industry will remain relatively soft in 2010 with a 1.1 percent decline in revenue per available room. This is the third consecutive year of falling revenue per available room in the U.S.
Smith Travel Research forecasts that hotel room supply will grow 1.2 percent in 2010, down from the 3.2 percent net increase in new rooms that came on line in 2009. With demand rising at a 1.5 percent pace, the average occupancy rate for the U.S. lodging industry should increase 0.3 percent to 55.2 percent in 2010.
As economic conditions continue to improve in 2011, hotel managers should begin to see some pricing power as a result of this turnaround. PKF Hospitality Research forecasts the average daily rate will increase 3.4 percent in 2011.
Moody’s Economy.com forecasts income and employment in 2012, to grow at a 4.4 percent pace. PKF Hospitality Research predicts hotel room revenue to grow 10.5 percent on a per-available-room basis in 2012.
Worldwide, Lodging Econometrics predicts that just 717 hotels, representing 82,620 rooms, will open in 2010. This is a 56% drop from 2009, when 1,301 hotels with 146,929 rooms opened. The new openings peak for the cycle was 1,345 hotels/154,667 rooms recorded in 2008.