Although we just hit the five-year anniversary of the financial crisis bailouts, our nation is still dealing with a slow moving recession that show little signs of reaching a full recovery, except for one sector: hospitality.
Recently, as reported in Hospitality Technology, PwC US released an updated lodging forecast showing steady growth in the sector. The report indicates that lodging demand will increase 2.2 percent by the end of the year. This, combined with still-restrained supply growth of 0.8 percent, is anticipated to boost occupancy levels to 62.2 percent, which is the highest since 2007.
Other highlights of the forecast include:
- – Occupancy levels at higher-priced hotels are ahead of prior peak levels
- – Industry revenue per room (RevPAR) is above its prior peak
- – Hotel construction activity, while rebounding, is still quite moderate
“While the pace of economic recovery remains an overhang on some segments, particularly group travel, we’re seeing business and leisure transient hotel demand remain robust, particularly in most of the U.S. top 25 markets,” said Scott D. Berman, principal and U.S. industry leader, hospitality & leisure, PwC . “As U.S. hotels enter the budgeting and rate negotiation period this fall with their most significant corporate customers, the foundation is in place for room rate gains, in part due to a favorable supply-demand balance.”
As economic growth is expected to strengthen overall in 2014, we will see a steady improvement overall for the hospitality sector. In addition, as business investment spending is growing, we will also see more companies planning group meetings and events in 2014.
A key driver of economic growth will be how hoteliers embrace innovations, and the most forward-thinking organizations will see the most optimal results.
For example, some budget hotels are winning the battle over luxury hotels by implementing innovative technologies that have essentially leveled the playing field when it comes to providing completely “frictionless” environment for guests. These hotels stand to make big gains in the upcoming year thanks to increased traveler confidence combined with new innovations to enhance brand loyalty.
With a new tide of travelers entering the marketplace – especially as the travel sector rebounds – it is the ideal time for hoteliers to use the right innovations to establish true differentiation and gain loyal guests who will be more than happy to support the brands they admire as they open up their pocketbooks to spend more on travel in the coming year.