Hotel Sector Sees 100 Straight Months of RevPAR Growth

June marked the hotel sector’s 100th consecutive month of growth in revenue per available room, reported STR, Hendersonville, Tenn.

The streak remains one year shy of the sector’s longest overall expansion cycle, which lasted from December 1991 through March 2001. However, since RevPAR decreased slightly one month in 1998, the industry’s current growth run is the longest.

The last time hotel RevPAR contracted was February 2010, said STR President and CEO Amanda Hite.

“As the country came out of the recession, the industry as a whole was in a great position with improved economic conditions, accelerated spending in both the leisure and business travel sectors and a negligible increase in room inventory,” Hite said. “That lack of significant supply growth coupled with consistently high demand has enabled hoteliers to continue to push occupancy and room rates beyond peak levels.”

Mark Woodworth, Senior Managing Director with CBRE Hotels Americas Research, Atlanta, said he has not been concerned about too much new supply coming online too quickly, which could slow the sector’s performance. “We remain very much in that mode, but we will be watching that very closely,” he said.

Hite noted regional economic conditions and supply growth have hindered performance in some markets, “but overall, the U.S. hotel industry is as healthy as it’s ever been,” she said. “Barring unforeseen circumstances, we expect growth to continue.” STR forecasts 2.9 percent RevPAR growth this year and 2.4 percent next year.

The second quarter “was another record-breaker,” said STR Senior Vice President of Operations Bobby Bowers. “Even though there was a slight artificial lift from the Easter calendar shift at the beginning of the quarter, second-quarter RevPAR growth accelerated from what we saw in the first quarter. The industry continues to benefit from demand across the travel segments as well as favorable macroeconomic conditions.”

The start of summer boosted demand for most major hotel markets, Bowers said. “That influx of demand lifted hotelier pricing power, as average daily rate growth was 70 basis points higher in the major markets even with significantly more new rooms available.”