Report Predicts Good Year For the Hotel Industry

Occupancy rates for U.S. hotels are expected to remain at record levels through 2017, according to PKF Hospitality Research. The group’s December 2015 “Hotel Horizons” report forecast the average daily rate (ADR) of national occupancy will be above average, at 66%, in 2016 and 2017.

With demand outpacing supply, property managers have leverage to raise room rates. PKF-HR predicts room rates will increase by 5.5% in 2016, followed by a 5.8% jump the following year.

Both these factors have created a booming hotel market, allowing developers to get better financing deals and put more project in the pipeline. About 132,000 rooms are under construction nationally, according to STR, compared to 129,000 rooms earlier this year.