ATLANTAThe US lodging industry will achieve 65% occupancy in 2015, the highest national occupancy rate since STR, Inc. began reporting data in 1987, according to the September 2014 edition of PKF Hospitality Research's Hotel Horizons. By the end of 2015, PKF-HR—a CBRE company—projects that the demand for lodging accommodations will have increased 25.8% since the depths of the recession in 2009, while the supply of hotel rooms will have grown by just 5.6%.

“An ever-improving economy and the favorable relationship between supply and demand, have led to significant growth in both revenues and profits from 2009 to the current year. We expect this trend to continue through 2017,” says R. Mark Woodworth, president of PKF-HR. “The 1990s were the only other time we observed such a sustained confluence of positive economic and market conditions.”

With US hotels achieving all-time high occupancy levels, PKF-HR believes that hoteliers will be able to increase their average daily rates at an average annual pace of 5.7% from 2015 through 2017. At the same time, Moody's Analytics, PKF-HR's source for economic projections, is forecasting the annual pace of inflation to average just 2.5%.

“The best news for US hotel owners and investors is that the combination of high occupancy levels and significant real ADR growth will perpetuate strong bottom-line gains,” says Woodworth. “PKF-HR is projecting the current three year streak of double-digit gains in net operating income to continue through 2016,” Woodworth noted. “We have not seen six years of such strong and sustained profit growth in the 78 years PKF has been tracking the US lodging industry.”

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Rayna Katz

Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.