The U.S. lodging industry started 2017 on a strong note. During the first quarter of 2017, hotel demand increased by 2.8 percent. The result was an occupancy of 61.1 percent, the highest first quarter occupancy rate reported by STR in the past 30 years.
“Since bottoming out in the fourth quarter of 2009, U.S. lodging demand now has grown for 29 consecutive quarters, and led to the record occupancy levels we currently are observing,” said R. Mark Woodworth, senior managing director of CBRE Hotels’ Americas Research (CBRE). “We realize that favorable prior year comparisons contributed to the strong growth in first quarter demand, and that pace cannot be sustained through the rest of 2017. However, given the positive economic outlook for the remainder of the year, we are projecting demand to outpace supply once again in 2017, thus resulting in an eighth successive year of occupancy growth for the U.S. lodging industry.”
According to the recently released June 2017 edition of Hotel Horizons®, the supply of available rooms in the U.S. is projected to increase by 2.0 percent during 2017 following a 2016 gain of 1.6 percent per STR. Concurrently, lodging demand is forecast to rise by 2.1 percent. The net result is an increase in occupancy from 65.4 percent in 2016 to a third consecutive annual record occupancy level of 65.5 percent in 2017.
Room to Grow
“We are in a period of record annual and quarterly occupancy levels. Accordingly, we need to look at specific days of the week, seasons of the year, and markets with new supply to identify when and where new lodging demand can be accommodated,” Woodworth stated. “These factors help to guide and explain our forecasts.”