A report from PricewaterhouseCoopers LLP has good news for the US hospitality industry: It is on track to hit a 20-year high in 2015.
The economy experienced a weather-related slowdown during the first three months of the year and then travel activity picked up noticeably in the second quarter, which resulted in “better-than-expected”occupancy numbers, according to the report.
Scott Berman, PwC’s U.S. industry leader for hospitality & leisure said that, after what he described as a “very uneasy”first quarter, there was a high degree of uncertainty.
However, summer helped the industry catch up and it has exceeded expectations to date.
Business and leisure travel continues to rise, and hoteliers are also reporting strong growth in the group segment, which still has some room to recover to peak levels. Leisure travel at the domestic and international levels signifies the rebound of group business, according to Berman. This is a part of the market that the industry has been trying to attract since the recession.
Occupancy levels for lower-priced chains are expected to meet or exceed prior peak levels, as price-conscious consumers look to save money on expenses while away from home.
Secondary and tertiary markets are starting to improve, and that is where more economy and flex service hotels are located.
PwC is expecting accelerating supply growth of 1.6 per cent next year due to construction of new hotel properties.
Supply growth in higher-priced chains will outpace growth in the lower-priced segments of the industry.
The only market of the top 25 listed in the study that has not seen consistent growth this quarter is Washington, D.C. Berman notes that this is due to the capital experiencing what he refers to as a “softer landing”during the recession.
