Following a strong first quarter for the hospitality industry, Auction.com Research said the volume of hotel deals are on a healthy post-recession pace due to moderate growth in the job market and an improved gross domestic product.
According to the Quarterly Hotel Monitor released by the market research division of
“The economy looked to be back on a growth track in the first quarter and hotel revenue has responded accordingly,” said Peter Muoio, head of Auction.com Research and the author of this study. “U.S. hotel room demand and operating conditions both have resumed a healthy post-recession growth rate.”
Seasonally adjusted hotel occupancies reached 62.3% in 1Q13 across the country. This is up from 61.9% in the fourth quarter of last year. Additionally, seasonally adjusted revenue per available room also rose by 1.9% in the first quarter.
Due to these increases, the monitor is projecting for 8.8% growth in RevPAR for 2013. Meanwhile, as supply catches up with demand, the report forecasts that occupancies will likely peak in 2014 or 2015, while room rates will continue to “gain steam” before leveling off in 2016.
“These solid conditions in operating fundamentals have been reflected in hotel deal volume and pricing, both of which remained healthy in the first quarter,” Muoio added. “Deal volume slipped slightly from the year-end closing flurry buy was nevertheless up more than 50% from a year ago.”
