- The US lodging industry was considered robust in 2014 and 2015 is expected to be as strong.
- The US lodging industry is anticipated to finish 2014 at approximately 64.5%.
- Significant recovery in demand has been experienced in 90% of the major markets
- The average room rate was expected to increase in 2014 by approximately 4.5% and is expected to increase by approximately 5.5% in 2015.
- 2014 RevPAR increases are anticipated to approach 9%.
- The 2014 increase in rooms supply should be less than 1%.
- 2015 anticipated increases are 1 to 2% in occupancy, 5 to 6% in average room rate and approximately 6 to 7% in RevPAR.
- The growth in demand(in all sectors) is fueling the increase in annual occupancies.
- The growth in rooms supply continues to be less than 1.5%
- Rooms supply growth is evident in all parts of the United States (both urban and suburban areas).
BUSINESS SCENARIOS FOR 2015 AND BEYOND - Atlanta
Metro Atlanta’s lodging market has seen a strong 2014 thus far, its ADR, RevPAR and occupancy increases carried primarily by its suburban submarkets. The city’s lodging industry has added 9400 jobs over the past year, and has accommodated over 22 million annual visitors.
Midscale and upper midscale Atlanta properties have seen strong occupancy and demand growth, and both classes’ room supply levels should begin rising to meet demand as most pipeline development lies in the mid-to-upper midscale range.
The city, overall, is expected to end 2014 with 5.5% ADR growth and 9.2% RevPAR growth, a fitting end to a strong year, which has included an 8.2% occupancy increase to date, a 3% ADR increase to date, and a strong 11.5% RevPAR increase to-date.
Submarkets – Metro Atlanta is broken into seven submarkets: Downtown, Midtown, Buckhead, Airport, COBB Galleria, Chamblee/Norcross and Perimeter Center/Roswell.
The most significant occupancy, ADR and RevPAR growth is taking place in Atlanta’s suburban markets thanks to their increasing walkability. Chamblee-Norcross is leading the way with 20% RevPAR growth, followed by Cobb Galleria with 17.6% RevPAR growth. The airport submarket should continue to grow as pipeline developments are in place following the recent introduction of the Choice Gateway properties.
Property Classes – Atlanta’s overall growth in demand across all property classes is highlighted by particularly strong midscale and upper midscale segments, which have seen the highest occupancy rates of all property classes this year.
Pipeline – There are currently 2247 rooms under construction in the Atlanta market, and over 9000 in the planning or final planning stages. Of those rooms in construction or planning stages, nearly 4000 are midscale. Atlanta’s supply growth is expected to grow by 1% in 2015.
Conclusion – Atlanta is expected to end its strong 2014 on the upswing, hitting near 10% RevPAR growth and over 5% ADR growth. Its mid-and-upper midscale lodging properties, particularly in suburban markets, should continue to prove promising as the city becomes increasingly walkable.
Despite a strong 2014 and a healthy pipeline, numbers are expected to dip slightly in 2015, as both ADR and RevPAR growth should slow somewhat. Forecasts past 2015 anticipate a moderately strong 2016 followed by a strong 2017.
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About Horwath HTL
Horwath HTL is the management consulting of Crowe Horwath International that specializes in hotel, leisure and tourism industries. Established in Asia in 1987, Horwath HTL has consulted about 4,000 hotel and tourism related projects throughout the region (including over 1,200 projects in China) for clients ranging from individually held businesses to the world’s most prominent operators, developers, lenders, investors and industrial corporations. Horwath HTL now operates offices in several key cities throughout the Asia Pacific region, including Auckland, Beijing, Hong Kong, Jakarta, Kuala Lumpur, Mumbai, Shanghai, Singapore, Sydney and Tokyo. Our offices work closely together to ensure that our clients receive a multi-skilled international perspective for their projects. Horwath HTL is also supported by the Horwath database, the largest and most complete hotel and tourism related database in the world. No other firm is better positioned to meet today’s and tomorrow’s industry challenges than Horwath HTL – Experts in the hotel, tourism and leisure industries.