Smith Travel Research today updated its 2010 U.S. lodging industry forecast, calling for lesser drops in rate and revenue than it predicted previously and reversing its forecast of a drop in occupancy.
The firm now expects occupancy will increase 1.9 percent this year to 55.8 percent, bringing occupancy recovery a year earlier than its previous forecasts. In November, STR said occupancy would drop by 0.2 percent this year
(BTNonline, Nov. 24, 2009). The recovery will pick up pace in the second and third quarters of this year, then moderate, according to STR president Mark Lomanno.
Revenue per available room and rates will still drop this year, though not by as much as in the previous forecast, the firm said. It expects average daily rate will fall by 2.3 percent and RevPAR by 0.5 percent, down from its earlier forecast of 3.4 percent and 3.6 percent drops, respectively.
"The takeaway is that 2010 is going to be significantly better than hoteliers thought it would be, and they plan their strategies accordingly," according to Lomanno. "It won't be back to 2007 or 2008 levels, and there will be easy comparisons to last year. 2011 will be a good year on top of a good year, and that is something we haven't seen in a while."
In 2011, the firm is forecasting a 1.9 percent increase in occupancy, a 3.5 percent increase in average daily rate and a 5.4 percent increase in RevPAR.
Supply growth for both years will be slow: a 2.2 percent increase in 2010, followed by a 1 percent increase in 2011, according to the firm.