Jun
19

PKF: Expect Strong Hotel Profits In 2014

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U.S. hotels are poised for significant gains in all the major metrics in 2014. PKF Hospitality Research LLC is projecting that U.S. hotels will enjoy a 7.7 percent increase in revenue per available room (RevPAR) in 2014, along with a 15.4 percent boost in net operating income (NOI).

“We expect the factors that have inhibited lodging performance during the first half of 2013 will dissipate as the year goes on,” says Mark Woodworth, president of Atlanta-based PKF Hospitality Research. “By 2014, any uncertainty caused by fears of fiscal cliffs and sequestration should be alleviated, thus resulting in improved attitudes among hotel guests, owners and operators.”

One lingering concern among hoteliers may be the recent rise in interest rates. “Moody’s Analytics, our source for the economic forecasts that drive our econometric models, has been projecting a 150 basis point increase in interest rates by year-end 2014. Accordingly, our positive lodging forecasts do incorporate any detrimental influence this may have on investments and inflation,” notes Woodworth.

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