Despite Rising Gas Prices, Summer Forecast for U.S. Hotels Predicts Meaningful Rate Gains

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According to STR's 2011 summer forecast, the U.S. hotel industry should expect to see a modest increase in demand for hotel rooms combined with meaningful rate gains this summer.

The summer travel season comprises June, July and August. STR predicts summer occupancy will increase 1.7 percent over summer 2010 to 66.7 percent, average daily rate (ADR) will increase 4.1 percent to US$103.01, and revenue per available room (RevPAR) will jump up 5.9 percent at US$68.68.

"Demand recovery began in earnest last summer and while the comparables are tough the 2011 summer season will be well attended," said Brad Garner, COO at STR. "More importantly this summer will be the continuation of industry-wide rate recovery and the tempering of consumer's expectations for heavily discounted hotels rooms.

"However, a boundary of tolerance for rising transportation costs (rising gas and airline prices) reached by consumers could mute occupancy and rate gains."

Year-over-year demand is expected to rise 2.5 percent (compared with an 8.6 percent year-over-year increase in summer 2010 and a 6.4 percent year-over-year decline in the summer of 2009). Supply is predicted to increase 0.8 percent (compared with a 1.8 percent year-over-year increase in summer 2010).

Revenue for summer 2011 is forecasted to increase 6.7 percent to US$30.9 billion, compared with the 10.1 percent increase to US$28.9 billion reported for summer 2010.

Room nights sold this July are expected to match the milestone set last year (July 2010) when the hotel industry sold more than 100 million rooms in a single month.

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