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STR Updates US Hotel Industry Forecast

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According to the latest forecast update from STR, the U.S. hotel industry is projected to end 2010 with increases in two of the three key performance measurements.

STR is projecting 2010 OR will increase 4.4% to 57.1%, while ADR is expected to end the year virtually flat with a 0.1% decrease to US$97.74, and RevPAR to rise 4.3% to US$55.77.

"Room rate growth trajectory will determine the magnitude of recovery," said Mark Lomanno, president of STR. "We're still a little bit worried about the ADR part of the equation. The industry is currently facing a lot of challenges, and there are all kinds of pressure on that ADR number: the OTAs, and still rebounding group business to name just two."

Supply is expected to grow 2.2% during 2010, and demand is projected to increase 6.6%. STR projects the industry will end 2011 with increases in all three key metrics. OR is forecast to rise 1.4% to 57.9%, ADR is expected to be up 3.9% to US$101.55, and RevPAR is projected to rise 5.3% to US$58.75.

STR also believes that supply during 2011 will end the year with a 1.1% increase, with demand projected to rise 2.5%.

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