Smith Travel Research on Wednesday revised its 2010 U.S.
hotel industry forecast, projecting rates will hold steady and revenue per
available room will increase more than called for in earlier forecasts.
The firm now expects average daily rates in 2010 will drop
only 0.1 percent from levels in 2009, compared with its June prediction of a
0.6 percent drop in average daily rates. It also upped its estimated RevPAR
increase for the year to 4.3 percent from the 3 percent increase it published
in June. Occupancy, meanwhile, will increase by 4.4 percent year over year—up
from the June forecast of 3.6 percent—to 57.1 percent, according to STR.
While hotels have indicated they plan to ask for corporate
rate increases during negotiations this year, U.S. hotels still are facing a
challenging climate on the rate front, STR president Mark Lomanno said.
"We're still a little bit worried about the ADR part of
the equation," Lomanno said in a statement. "The industry is
currently facing a lot of challenges, and there are all kinds of pressure on
that ADR number: the online travel agencies and still rebounding group business,
to name just two."
STR predicts rate growth to occur in 2011. It is forecasting
a 3.9 percent increase in average daily rate for the year, alongside a 1.4
percent increase in occupancy and a 5.3 percent increase in RevPAR.