Fitch: U.S. Lodging Still in a Good Place

    Accelerating U.S. GDP growth and low levels of new supply set the table for strong U.S. lodging industry fundamentals during 2015, according to Fitch Ratings. Robust demand has boosted occupancy rates, providing hotels with material pricing power. Fitch expects U.S. revenue per available room (RevPAR) to increase by 6 percent this year, based on a 1 percent occupancy gain and 5 percent average daily room rate (ADR) growth. Improving economic fundamentals and limited new supply support Fitch’s view that this upcycle will endure for a longer-than-average period. Trailing 12-month RevPAR growth has been positive for 54 sequential months during this cycle as of February 2015, a relatively short time compared to the 112-month recovery that began in the early 1990s. Although closer in duration to the 65-month recovery that started in the early 2000s, Fitch expects further RevPAR gains over the next one to three years based on its review of key lodging cycle leading indicators.