Hotel Occupancy- and Rates!- Rising

A new projection from PricewaterhouseCoopers Hospitality and Leisure Practice predicts that the average daily hotel rate in the United States for the full-year of 2011 will increase by 3.6% as compared to 2010 rates. An additional 5.1% rate increase in 2012 is expected to follow.

Despite this, demand for hotel rooms has been abnormally high in 2011, especially in July, when, according to Smith Travel Research, 105 million room nights were booked- the highest number of room nights ever sold in one month, even with a 3.9% average daily rate increase for that particular month. The only other single month (in any year) that more than 100 million rooms were sold in the U.S. was in July 2010.

It will be interesting to keep an eye on whether the predicted price increases for the average daily hotel rate will have a substantial adverse effect on the increasing occupancy rates, or if travelers will continue to book more hotel rooms regardless of price increases. It would be unfortunate if hotels detracted potential customers with a continuation of inflated rates; however, considering the data above, this scenario does not seem to coincide with the findings of the conducted studies.