Increasing
occupancy amid a supply growth slowdown will boost U.S. hotel rates by 5.1
percent in 2011, according to a forecast issued by PricewaterhouseCoopers on
Monday.
PwC said
continued improvement in the U.S. economy would boost both business and leisure
travel this year, leading to an increase of 3.2 percent in lodging demand. At
the same time, hotel construction has slowed to its lowest level in about two
decades, meaning U.S. hotel supply will increase only by 0.6 percent in 2011.
"Robust lodging demand growth
during 2010 and an improved economic outlook for 2011 are raising expectations
for a continued recovery in the U.S. lodging market," PwC principal and
U.S. hospitality and leisure leader Scott Berman said in a statement. "Operators
will increasingly shift their focus to generating higher room rates in markets
that have already recognized a solid base of demand recovery."
The firm
projects occupancy will reach 59 percent this year, up from 57.6 percent in
2010 but still well below the 2007 occupancy level of 62.8 percent. It also
expects revenue per available room will increase by 7.8 percent, which would be
the metric’s sharpest increase since 2006.
Meanwhile, STR
also on Monday released full-year data for 2010, which shows the year ended
with occupancy up 5.7 percent from 2009 levels, RevPAR up 5.5 percent and rates
nearly flat, down 0.1 percent. STR CEO Mark Lomanno said that while 2010 will
be known as a year of recovery, such factors as a slow return of group business
prevented rate growth.
New York was an exception, with rates up 7.5 percent for the year,
according to STR.