STR Predicts 2011 to be Good Year for U.S. Hotel Industry

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According to Smith Travel Research (STR), the U.S. hotel industry is projected to end 2011 with increases in all three key performance measurements.

STR projects 2011 occupancy will increase 1.8 percent to 58.5 percent, average daily rate is expected to end the year up 4.2 percent to US$102.21, and revenue per available room is projected to rise 6.1 percent to US$59.78.

Supply is expected to report slight growth in 2011 with a 0.7-percent increase, and demand is projected to increase 2.5 percent.

"The stronger hotel demand fundamentals the U.S. hotel industry experienced in 2010 will result in a quicker turnaround than we had expected," said Mark Lomanno, CEO of STR. "While this strength resulted in rapidly recovering occupancies last year, we look for rebounding room rates to lead RevPAR growth in 2011 and 2012. While it may be the second half of 2011 before we begin to see rapidly accelerating room rates, by the time we get to 2012 we now expect room rate growth to rival the boom years of 2006 and 2007."

STR also is projecting increases in all three key performance metrics during 2012. Occupancy is expected to rise 1.7 percent to 59.5 percent, ADR will increase 6.8 percent to US$109.16, and RevPAR is projected to end the year up 8.6 percent to US$64.93.

Supply during 2012 is expected to end the year virtually flat with a 0.5-percent increase, and demand is projected to rise 2.2 percent.

This updated forecast was originally presented during the Americas Lodging Investment Summit (ALIS) on 24 January 2011.

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