U.S. Tourism to Enjoy Continued Growth Through 2017
According to STR and Tourism Economics' most recent forecast released this week at the NYU International Hospitality Industry Investment Conference, the U.S. hotel industry is projected to experience continued performance growth through 2017.
For total-year 2016, the U.S. hotel industry is predicted to report a 0.4% increase in occupancy to 65.7%, a 4.0% rise in average daily rate to $124.86 and a 4.4% increase in revenue per available room to $82.07. During that same period, demand growth (+2.1%) is expected to outweigh supply growth (+1.7%).
"Albeit at a lower growth rate than in previous years, we expect RevPAR in the U.S. to continue to reach record levels through 2017," said Amanda Hite, STR's president and CEO. "The gap between demand growth and supply growth continues to lessen, and occupancy growth has decelerated, but rate will continue to drive RevPAR barring any unforeseen circumstances."
Among the Chain Scale segments in the U.S., the Independent segment is expected to report the largest year-over-year increases in each of the three key performance metrics in 2016: occupancy (+0.7%), ADR (+4.2%) and RevPAR (+4.9%). Two other segments are projected to report RevPAR growth above 4.0%: Upper Upscale (+4.3%) and Luxury (+4.2%).
Of the Top 25 Markets, 16 are expected to experience RevPAR performance between 0% and +5.0% in 2016. Six markets are expected to see RevPAR growth in the range of 5.0% to 10.0%: Dallas, Texas; Los Angeles/Long Beach, California; Nashville, Tennessee; Norfolk/Virginia Beach, Virginia; San Francisco/San Mateo, California; and Tampa/St. Petersburg, Florida.
For 2017, STR and Tourism Economics project the U.S. hotel industry to report flat occupancy, a 3.8% rise in ADR to $129.66 and a 3.8% increase in RevPAR to $85.22.
Also in 2017, supply (+1.9%) and demand (+1.9%) are expected to grow at the same pace.
Demand growth in the U.S. has outpaced supply growth each year dating back to 2010.