Travel Weekly says U.S. hotel industry will move cautiously forward in 2013

In its 2013 preview of the U.S. hotel industry, Travel Weekly led its forecast with PKF Hospitality Research President Mark Woodworth’s advice from last October’s Lodging Conference in Phoenix, “hedge your bets.”

As questions about the so-called fiscal cliff and its tax ramifications, especially for wealthier U.S. citizens, continue to affect the spending attitudes among the most active business and leisure travelers, the travel trade says it is more difficult to predict how the industry will trend in the next twelve months.

Here is an excerpt of Travel Weekly’s 2013 hotel industry preview:

  • Most analysts say the domestic supply of about 4.9 million hotel rooms will increase by less than 1 percent this year. That will prevent the double-whammy of aggressive hotel construction and the ensuing economic downturn that struck the U.S. lodging industry six years ago.

  • Most recently, PricewaterhouseCoopers cut its forecast for 2013 revenue per available room (RevPAR) growth to 5.4 percent from 5.6 percent, setting it at $65.06, which is still below the 2007 peak.
  • Luxury hotels will see the biggest gains, with budget properties growing the slowest, and all of the other middle sectors falling in line.

  • Additionally, hoteliers will face the twin challenges of more government scrutiny of both resort fees, which have enabled operators to collect more revenue without overtly hiking room rates, and of public-sector travel spending.

  • On the bright side, Pricewaterhouse predicts that occupancy will increase for the fourth straight year, to 61.9 percent, the highest level since 2007. "Despite slow economic growth, transient business travel has continued to gradually improve from recession-related lows," Pricewaterhouse reports. "This points to some incremental growth in leisure travel demand in 2013, though elevated levels of unemployment and underemployment weigh on household spending choices."

    Either way, many hoteliers have reached agreements to either reflag existing properties or build new ones in order to position themselves to benefit from what they hope will be a continued increase in demand.

Click here to read the full Travel Weekly article.

January 2, 2013
Photo caption:
With occupancy expected to increase for the fourth straight year, the overall forecast for the hotel industry remains optimistic, but guarded.