Crystal Ball – Hotel Performance

PricewaterhouseCoopers is bullish on hotels, forecasting 5.9% revenue-per-available-room growth this year at the Hotel Equities and Lender Perspectives conference earlier this month.  On a not-entirely-unrelated note, STR reported that the total active U.S. hotel development pipeline is comprised of 2,717 projects, totaling 320,750 rooms, the following week.

To put that pipeline report in context, it

  • represents a 9.2% increase in the number of rooms in the total active U.S. pipeline compared with March 2012, and a 19.3% increase in rooms under construction.  For possibly better context, STR also reports that the red-hot Asia/Pacific region has a development pipeline comprised of 1,788 hotels totaling 385,043 rooms.

Anne R. Lloyd-Jones, managing director at HVS, must have had some insight on the U.S. pipeline.  She predicted, at the conference, that hotel supply could soon become an issue for hotels, given the low cost of capital and positive industry fundamentals.

“I think new supply will come back stronger … than any of our forecasts indicate.”

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