Smith Travel Research this week issued an updated U.S. hotel industry forecast projecting stronger occupancy, rate and revenue performance this year.
Echoing PKF Hospitality's
forecast last month, Smith Travel Research reversed earlier predictions of a decline in revenue per available room. The firm now forecasts RevPAR to increase by 3 percent year over year in 2010.
Additionally, STR expects occupancy to increase 3.6 percent to 56.7 percent, up from its April forecast of a 1.9 percent increase.
STR president Mark Lomanno said the biggest RevPAR gains would be in the upper tiers. "It's definitely going to be a luxury/upper upscale-led recovery, which is a textbook recovery," he said in a statement. "That's important for the industry to regain pricing power across the board."
The firm still expects average daily rates to be down this year, but only by 0.6 percent, compared with its April forecast of a 2.3 percent drop. After that, the firm expects "fairly rapid ADR movement soon," according to Lomanno.
In 2011, STR projects occupancy will rise 2.5 percent, rates will be up 3.9 percent and RevPAR will increase by 6.5 percent.