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2015 U.S. Hotel Forecast Released, Strong Demand Continues

2015 U.S. Hotel Forecast Released, Strong Demand Continues

Vacation News » United States Edition | By Miho Favela | November 25, 2014 9:01 AM ET



According to STR and Tourism Economics' most recent forecast, the U.S. hotel industry is expected to end 2014 with a 4.5-percent increase in demand, the largest increase since 2011.

"We expected to see positive hotel performance in 2014, and demand growth certainly exceeded our expectations," said Amanda Hite, president and COO of STR. "With the end of 2014 in sight, we anticipate the industry to end on a high note. We are forecasting occupancy to end at 64.4 percent, a level the industry hasn't seen since 1996. The forecasted actual average daily rate and revenue per available room will also set records, as both of those metrics are expected to end at the highest rates we've seen since STR started tracking data in 1987. We expect the momentum to carry over into 2015, as more positive performance is on the horizon for the hotel industry."

In 2014, STR and Tourism Economics expect occupancy to increase 3.7 percent to 64.4 percent, ADR to grow 4.6 percent to $115.53 and RevPAR to rise 8.5 percent to $74.42. Supply is forecasted to grow by 0.8 percent for the year.

"Lodging demand has recently expanded at more than twice its long-run pace," said Adam Sacks, president of Tourism Economics. "This over-performance tells us that room demand is likely to realize more modest gains in 2015, despite the likelihood of stronger economic growth. Meanwhile, room rates will make the largest contributions to RevPAR as hotels are emboldened by elevated occupancy rates. We expect inflation-adjusted ADR to reach a new peak in 2015."

In 2015, STR and Tourism Economics predict occupancy to rise 1.1 percent to 65.1 percent, ADR to increase 5.0 percent to $121.37 and RevPAR to grow 6.2 percent to $79.06. Demand is expected to increase 2.4 percent, and supply is predicted to increase 1.3 percent in 2015.

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