Smith Travel Releases Improved Hotel Forecast for 2010, 2011

The U.S. hotel industry is expected to end 2010 with stronger performance in all three key measurements than previously predicted, according to Hendersonville, Tenn.-based Smith Travel Research.

Smith Travel predicts 2010 occupancy to increase 1.9% to 55.8%, average daily rate (ADR) to decrease 2.3% to $95.45, and revenue per available (RevPAR) room to end the year virtually flat with a 0.5% decrease to $53.22.

Supply in 2010 is projected to grow 2.2% and demand is expected to rise 4.1%.

“We think the recovery will pick up its pace during the second and third quarters of this year, then it will moderate,” said Mark Lomanno, Smith Travel’s president, in a statement.

The forecast for 2011 predicts the industry to end the year with increases in all three key performance metrics: Occupancy will increase 1.9% to 56.8%; ADR will rise 3.5% to $98.79; and RevPAR will be up 5.4% to $56.12.

Supply in 2011 is projected to be up 1% and demand is expected to increase 2.9%.

“The takeaway is that 2010 is going to be significantly better than [hoteliers] thought it would be, and they plan their strategies accordingly,” Lomanno continued. “It won’t be back to 2007 or 2008 levels, and there will be easy [comparisons to last year]. 2011 will be a good year on top of a good year, and that is something we haven’t seen in awhile.”

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