By Danielle Douglas
Consumers contemplating a getaway may want to book a hotel room sooner rather than later, as room rates are set to rise this year. Substantial increases of $10 or more are at least another year or two away, but the lodging industry plans to take advantage of improving market conditions.
Consumers contemplating a getaway may want to book a hotel room sooner rather than later, as room rates are set to rise this year. Substantial increases of $10 or more are at least another year or two away, but the lodging industry plans to take advantage of improving market conditions.
Several leading hotel operators including Marriott International, Hilton Worldwide and Starwood Hotels and Resorts are incrementally upping average daily rates in light of the return of leisure and business travel, and the relatively fixed supply of rooms given the lack of new construction.
"We continue to see strength in pricing," Arne Sorenson, president and chief operating officer of Bethesda-based Marriott, said at the Americas Lodging Investment Summit here last week.
Marriott, which operates more than 3,000 hotels in 68 countries, got a jump on its competitors by selectively raising rates last year, before any meaningful pickup in travel. The gamble paid off as rooms began to fill in the summer.
Average daily rates for the U.S. hotel industry was $98.08 by year's end, compared with $97.51 in 2009, according to Smith Travel Research. The firm is forecasting a 4.2 percent increase in daily rates, while Colliers PKF Hospitality Research estimates 4.6 percent.
Locally, average daily rates are forecast to increase about 1.7 percent in the next four quarters, after falling 4 percent in the prior 12-month period, according to Colliers.
Rooms in the top 25 lodging markets are priced well under peak 2007 rates, Jan Freitag of Smith Travel Research told a room packed with conference attendees. Average rates in Washington, for instance, are $13 below peak prices.
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