Are you feeling good about the state of the hotel industry? Well if no, then it?s time to reevaluate your thinking because things are going absolutely fantastic when it comes to the travel economy. In fact 2013 was an incredible year that broke most real dollar records and this year it?s expected last year?s records will be short lived.
No, not because the industry is falling down, but because it?s rapidly rising. So today?s records will be superseded by even better results when this year is tallied. Industry wide we?ll see even higher numbers for ADR and RevPAR as well as rom nights sold. And all indications point to the next few years showing more continued growth.
Moderate supply growth combined with more American traveling than ever before combined with a massive influx on international travelers will help hoteliers push rates (if they?re smart enough). Oh yeah, more people are also traveling for business than in years and that weakening of group business demand we?ve been worried about seems to be stabilizing. In all, business trip taken this year should climb 1.7 percent to more than 461 million trips says the Global Business Travel Association Business Travel Index Outlook.
Examining industry fundamentals, records are being broken everywhere, including most industry revenue ever at $122 billion according to STR for 2013. Other records broken in 2013 were ADR, RevPAR, and most room nights sold at 1.1 billion.
According to numbers supplied by PKF, final 2013 occupancy was 62.3 percent and is expected to rise to 63.2 percent and 64.4 percent for 2014 and 2015 respectively. It?s also expected that ADR will increase 4.8 percent to $115.60 this year and rise another 5.6 percent to $122.12 in 2015. ADR and occupancy increases together will help propel RevPAR from $68.69 (5.4 percent increase from 2012) up another 6.6 percent to $73.10 in 2014 while rising an additional 7.5 percent to $78.62 in 2015.
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Source:? Glenn Haussman (2014), Tracking That Tremendous Travel Outlook, Hotel Interactive?http://www.hotelinteractive.com/article.aspx?articleid=32803 published May 05, 2014. Viewed May 08, 2014.