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PKF Predicts Record Hotel Occupancy in 2015

Next year will be a banner year for U.S. hotels, according to PKF Hospitality Research (PKF-HR), which last week published a new forecast predicting 65 percent occupancy for the U.S. lodging industry in 2015. If its prediction comes true, it will be the highest national occupancy rate since fellow hotel-data provider STR Inc. began reporting hotel occupancy data in 1987.

Behind its forecast is good old-fashioned supply and demand, according to PKF-HR: By the end of 2015, it projects, demand for lodging accommodations will have increased 25.8 percent since the bottom of the recession in 2009, while the supply of hotel rooms will have grown just 5.6 percent.

"An ever-improving economy, and the favorable relationship between supply and demand, have led to significant growth in both revenues and profits from 2009 to the current year. We expect this trend to continue through 2017," PKF-HR President R. Mark Woodworth said in a statement. "The 1990s were the only other time we observed such a sustained confluence of positive economic and market conditions."

Naturally, an increase in occupancy will drive an increase in average daily rates (ADR), according to PKF-HR, which predicts an annual increase in ADR of 5.7 percent from 2015 through 2017.

"The best news for U.S. hotel owners and investors is that the combination of high occupancy levels and significant real ADR growth will perpetuate strong bottom-line gains. PKF-HR is projecting the current three-year streak of double-digit gains in net operating income to continue through 2016," Woodworth continued. "We have not seen six years of such strong and sustained profit growth in the 78 years PKF has been tracking the U.S. lodging industry."

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