It’s a great time to be in the hospitality business: according to an industry report cited in Hospitality Net, profits are set to be at their highest since the recession, and the trend looks likely to continue well into 2015.
According to the 2014 edition of Trends® in the Hotel Industry, an annual report recently released by PKF Hospitality Research, LLC (PKF-HR), hotel profits are on pace to exceed pre-recession levels in 2014. Despite the slowdown in the pace of rooms revenue (RevPAR) growth in 2013, U.S. hotels were able to sustain strong gains in net operating income (NOI) during the year. Looking forward, the combination of rising average daily rates (ADR) in a low-inflation environment will allow for continued profit growth in excess of 10 percent through 2015. This five year period (2011-2015) of continuous double-digit gains on the bottom-line will be the longest such streak for
hotels since the high inflation days of the late 1970s. "By 2014, the average hotel in our Trends® sample will finally achieve bottom-line profits greater than their pre-recession peak on a nominal basis. Perhaps of greater importance is that hotel profits, in inflation-adjusted terms, will exceed 2007 levels in 2015," said R. Mark Woodworth, president of PKF-HR. PKF-HR is forecasting unit-level NOI increases of 12.4 percent in 2014, and another 14.2 percent in 2015. U.S.
Trends® in the Hotel Industry is an annual compendium of hotel operating statistics that dates back to 1937. The 2014Trends® results are based on a sample of operating statements from approximately 7,000 properties in the
that voluntarily participated in the survey. "The 10.1 percent increase in hotel profits during 2013 was the result of a 5.4 percent gain in total hotel revenue, along with a 3.7 percent increase in operating expenses," said R. Mark Woodworth, president of PKF-HR. "An accumulation of market, operational, and economic factors has resulted in a business environment that is very conducive to increases of both the top-line and bottom-line. We are in the middle of the sweet spot in the business cycle for hotel profits." U.S.
In other words, incredible opportunities abound for just about any hospitality business across the country. If you want to make the most of this exceptional growth, you need to ensure that your establishment is meeting the demands of consumers. You want a venue that is up-to-date, attractive, and accommodating, especially in an industry that is as client-centric as hospitality.
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