Hotel room rate gains are expected to speed-up in 2015 as the industry reaches its highest occupancy level since 1984, according to a new lodging forecast by PwC US.
PwC US said in the first nine months of 2014 group demand outpaced the individual transient segment.
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The company expects the increased momentum of group demand growth to continue in the fourth quarter of 2014, and into 2015.
The better outlook for group demand, coupled with continued transient travel activity and a positive economic environment is predicted to drive a 8.2% increase in RevPAR in 2014.
Supply growth is estimated to increase in 2015, resulting in moderate growth in occupancy.
Industry-wide occupancy levels are expected to reach 64.9%, the highest since 1984.
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By GlobalDataPwC estimates lodging demand in 2014 to increase to 4.3%, which combined with still-restrained supply growth of 0.9%, is anticipated to increase occupancy levels to 64.2%.
PwC’s outlook expects accelerating supply growth of 1.4% in 2015, as construction of new hotels continues at good pace.
The company said occupancy levels in the lower-priced chain scale segments are expected to approach or cross prior peak levels, as price-driven compression from higher-priced hotels drives demand to lower priced hotels.
PwC principal and US industry leader of hospitality & leisure Scott Berman said: "Group demand improved significantly in the third quarter, leading to stronger-than-expected occupancy levels.
"Despite an evolving supply pipeline, industry demand trends are expected to remain robust, giving confidence to the operating community to drive room rates higher in 2015."
