News for the Hospitality Executive |
NEW YORK, Jan. 23, 2012 --
Reflecting year-end 2011 results, an updated lodging forecast released
today by PwC US anticipates pricing recovery to be the key driver of
revenue per available room ("RevPAR") growth in 2012. Despite a year
that was marked by macroeconomic uncertainty, and resulting shaky
consumer and business confidence, hotels in the US ended 2011 on a
strong note. Lodging performance exceeded expectations in the fourth
quarter, in part due to a short-term uptick in economic activity.
Hotels across the spectrum of price segments experienced occupancy and
average daily rate ("ADR") gains in 2011, reflecting the breadth of the
recovery. Overall, hotel occupancy in 2011 recovered to 60.1 percent,
slightly ahead of its ten-year average of 60.0 percent. Despite a
still-uncertain economic environment, improved occupancy levels and a
recovery in travel are expected to give hotels the confidence to
increase prices in 2012. PwC's latest lodging industry forecast expects
RevPAR growth of 6.5 percent in 2012, heavily driven by ADR increases.
PwC's updated quarterly lodging forecast reflects an updated macroeconomic forecast released earlier this month from Macroeconomic Advisers, LLC, which expects economic growth in the US to continue to be weighed down by spillover effects from the sovereign debt crisis in Europe. Macroeconomic Advisers' outlook expects slow real gross domestic product ("GDP") growth during the first half of 2012, followed by a gradual acceleration in economic activity, reaching an above-trend pace of 2.9 percent annualized growth by the fourth quarter. In the face of a still-uncertain economic environment, the outlook for improved pricing in the lodging sector reflects the ongoing recovery of business travel, as well as gains in corporate events and other group business. As a result, lodging demand in 2012 is expected to increase 1.8 percent, which combined with restrained supply growth of 0.5 percent, is expected to boost occupancy levels to 60.9 percent, the highest since 2007. Increased confidence from occupancy gains, particularly in the higher-priced segments of the industry, is expected to allow hotels to achieve valuable increases in room rates. As a result, ADR is expected to increase by 5.1 percent in 2012, driving a RevPAR increase of 6.5 percent.
"It will have been a five-year detour, but continued recovery in 2012 is expected to lift industry RevPAR very close to its 2007 peak," said Scott D. Berman, principal and U.S. industry leader, hospitality & leisure, PwC. "The steepest portion of the demand recovery is behind us with operators' focus on room rate becoming increasingly more important." A full copy of PwC's US Lodging Forecast can be accessed by visiting: http://www.pwc.com/us/en/asset-management/hospitality-leisure/publications/index.jhtml About the PwC Network PwC firms help organizations and individuals create the value they're looking for. We're a network of firms in 158 countries with close to 169,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com . © 2012 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. |
Contact: Suzanne Dawson Linden Alschuler & Kaplan +1-212-329-1420 [email protected] or Laura Schooler PwC US +1-646-471-3229 [email protected] Web Site: http://www.pwc.com
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