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US Hotels to Resume Strong Growth

Dec 20, 2013


The US lodging industry is expected to grow in revenue and profit in 2014 and 2015, according to PKF Hospitality Research, LLC (PKF-HR).  



According to the recently released edition of Hotel Horizons, national revenue per available room (RevPAR) is projected to increase by 6.6 percent in 2014, followed by another 7.5 percent boost in 2015.  Concurrently, hotel profits should see 12.8 percent and 14.5 percent growth respectively over the next two years.

“As anticipated, RevPAR growth slowed down a bit in 2013 compared to the previous three years,” says R. Mark Woodworth, president of PKF-HR. “Entering the year, we knew fears of falling off the fiscal cliff would create uncertainty in the minds of potential travelers. However, despite the challenging economic environment, we observed above average growth in lodging demand, average daily rates (ADR), RevPAR, and profits.”

PKF-HR estimates that by year-end 2013, lodging demand will grow by 2.1 percent.  This is greater than the projected 0.8 percent increase in supply, resulting in a 1.3 percent gain in occupancy.  The 62.1 percent occupancy level estimated for the year surpasses the long-run average of 61.9 percent.

PKF-HR’s lodging forecasts are driven by economic projections provided by Moody’s Analytics.  According to Moody’s, 2014 is showing all the signs of a significant growth year.

“As lodging forecasters, it is our role to interpret the economic variables provided by Moody’s and produce projections of hotel performance,” says John B. Corgel, the Robert C. Baker professor of real estate at the Cornell University School of Hotel Administration and senior advisor to PKF-HR. “Moody’s has identified certain economic factors that we believe will have a very positive impact on the growth of lodging demand and room rates over the next few years.”

Hotels located in airport, resort, and suburban areas are forecasted to achieve the greatest gains in RevPAR in 2014.  Lagging in RevPAR growth will be properties operating along the nation’s interstate highways and in small towns.





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