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Hotel forecast: Expect rate hikes in 2012

Travelers should expect to see higher-than-average hotel rate increases in both 2012 and 2013, according to PKF Hospitality Research’s latest U.S. hotel industry forecast.

“Owners and operators are now focused on more aggressive pricing policies, which in turn will translate into strong growth in hotel profits,” Mark Woodworth, president of PKF Hospitality Research, says in his firm’s latest Hotel Horizons report.

But whether a hotel will try to raise its rates – and by how much – will vary.

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Generally, more expensive hotels will have a better chance of raising rates than less expensive ones, the report says.

That’s because hotels that range from Mariotts, Hiltons and Hyatts to Ritz-Carltons, Four Seasons and St. Regis properties are expected to fill a greater share of rooms than the long term average in both 2012 and 2013, Woodworth says. The same can’t be said for lower-priced hotels.

Another factor surely will be whether a hotel has recently renovated, since updates typically help hotels lift their rates.

The average daily rate (ADR) for U.S. hotels is expected to increase by 4.7% in 2012 and by another 5.3% in 2013. The expected increases will exceed the long-term average growth rate of 2.8%.

“With national occupancy levels approaching their long-term average, and no meaningful new hotel supply additions in the foreseeable future, it is not a surprise that the pace of ADR growth is forecast to accelerate,” Woodworth says.

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