U.S. Hotel Industry to End 2010, Start 2011 with Uptick in Performance Metrics

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According to Smith Travel Research (STR) latest forecast update, the U.S. hotel industry is projected to end 2010 with increases in two of the three key performance measurements.

STR projects 2010 occupancy will increase 4.4 percent to 57.1 percent; average daily rate is expected to end the year virtually flat with a 0.1-percent decrease to US$97.74, and revenue per available room to rise 4.3 percent to US$55.77.

"Room rate growth trajectory will determine the magnitude of recovery," said Mark Lomanno, president of STR. "We're still a little bit worried about the ADR part of the equation. The industry is currently facing a lot of challenges, and there are all kinds of pressure on that ADR number: the OTAs, and still rebounding group business to name just two."

Supply is expected to grow 2.2 percent during 2010, and demand is projected to increase 6.6 percent.

STR projects the industry will end 2011 with increases in all three key metrics. Occupancy is forecast to rise 1.4 percent to 57.9 percent, ADR is expected to be up 3.9 percent to US$101.55, and RevPAR is projected to rise 5.3 percent to US$58.75.

Supply during 2011 is expected to end the year with a 1.1-percent increase, and demand is projected to rise 2.5 percent.

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