By Rob Starr, Content Manager, Big4.com
PwC expects RevPAR growth of 5.9% in 2013, representing the fourth year of US lodging recovery. The updated estimates in PwC Hospitality Directions US are based on a quarterly econometric analysis of the lodging sector, using historical statistics supplied by Smith Travel Research and other data providers, and an updated macroeconomic forecast released by Macroeconomic Advisers, LLC.
As stronger business transient and group activity returns to higher-priced hotels, revenue management initiatives are anticipated to drive increased pricing of available hotel rooms, resulting in a continuation of meaningful RevPAR gains in US Lodging. Hotels in the lower-priced segments have not experienced as solid of a recovery in occupancy, but are still expected to realize increased room rates as demand gradually strengthens.
“Recent results have exhibited the underlying tenacity of a US Lodging recovery, despite ongoing economic uncertainty,” said Scott D. Berman, principal and U.S. industry leader, hospitality & leisure, PwC. “At the outset of 2013, the lodging industry has reached a point in the cycle where industry stakeholders are more confident about their performance, with more reason to be optimistic, based on the underlying strength of the broader travel and tourism sectors.”
Despite the near-term economic challenges, lodging demand and, more importantly, pricing, are expected to remain on positive trajectories. Overall, based on the analysis referenced above, PwC expects US Lodging demand in 2013 to increase 1.8 percent, which combined with still restrained supply growth of 0.8 percent, is anticipated to boost occupancy levels to 62.0 percent, the highest since 2007. While hotels across the spectrum of price tiers are expected to benefit from this recovery, hotels in the higher-priced segments are expected to experience the strongest gains. Occupancy levels at hotels in the luxury, upper-upscale and upscale segments have already exceeded pre-recession peaks