Login form
Sorry, User can NOT register!

As we enter the ninth year of recovery….

As we enter the ninth year of recovery since the Great Recession occupancies are at a record level of 65.9 percent.  The average occupancy level over the past 30 years has been 62.3 percent.  Year over year occupancy grew by an average of 0.2 percent during this period.  Since 1987, hotel supply has increased by 72.3 percent.  Meanwhile, during that same period, demand increased 78.5 percent.  Thus creating the current market we are all enjoying where demand has exceeded supply.  Driving this increase demand is the weekend traveler.  Weekend occupancy is now 9 points higher than weekday occupancy and as expected weekend ADR is higher than weekday ADR.  Smith Travel Research reports the occupancy for 2016 was 65.4 percent and for 2017 it was 65.9 percent.  The ADR for 2016 was $124.13 and for 2017 it was $126.72.  The Rev Par for 2016 was $81.15 and for 2017 it was $83.57.  All three were up as compared to the previous year.  Lodging Econometrics estimates there are 1,146 projects with 130,633 rooms in the pipeline for 2018 and 1,153 projects with 134,900 rooms in the pipeline for 2019.

Continued growth is forecasted for the hotel industry although at a slower pace than recent years.  Occupancy for 2018 is expected to increase just 0.1 percent with a 2.3 percent jump in ADR and rev par gain of 2.4 percent.  The deceleration in the rate of occupancy growth is due to the influx of new supply.

Occupancy:     2016:  65.4%           2017:  65.9%           2018 Projected:  66.0%

ADR:                  2016:  $124.13        2017:  $126.72        2018 Projected:  $129.63

Rev Par:           2016:  81.15             2017:  83.57             2018 Projected:  85.58

The year 2015 is considered by many to have been when the market peaked and that we could even be back at the beginning of a new cycle.  The experts predict smooth sailing ahead for the hotel industry.

It continues to be a Seller’s market as we have more Buyers than Sellers.  Prices are high, financing is available and interest rates remain historically low.