By Jerod S. Byrd, HVS
PHILADELPHIA—Occupancy levels in the Philadelphia region are anticipated to strengthen moderately in the next several years, reflecting levels similar to pre-recession numbers as demand outpaces the additional room supply, said presenters and panelists at last week’s U.S. Hotel Market Connections sponsored by HVS.
Average rates are also forecast to strengthen year-over-year as hoteliers continue to renegotiate rates with corporate accounts. Rates for groups and leisure visitors also should increase as the local and national economies continue to recover.
Revenue per available room levels for Philadelphia hotels should strengthen in the near term, particularly as existing hotels continue to drive room rate.
HVS forecasts RevPAR to grow at around 5% annually over the course of the next two years but then drop off moderately as economic conditions begin to normalize.
In the years beyond, the strengthening of Philadelphia’s diverse businesses, attractions and demand base should allow the market to continue to improve.