Several cities across the United States stand to benefit from new hotel construction this year, according to the latest research from Marcus & Millichap.
In its national hospitality investment forecast, Marcus & Millichap reported that 110,000 hotel rooms are scheduled to be completed this year, while several thousand more rooms are ready for ground-breaking. According to the report, this all comes out to a 1.6 percent growth this year in the number of hotel rooms across the country, though most of these new rooms are hitting the nation’s largest 25 markets. This is the greatest yearly total of new hotel rooms in eight years.
Despite the new hotel rooms, Marcus & Millichap expects hotel occupancy rates to remain high. Marcus estimates that these occupancy rates will jump 30 basis points this year to 65.9 percent. The report cites a lower national unemployment rate and falling gas prices that are encouraging more consumers to travel this year.
This will result in a 5 percent increase in full-year RevPAR — revenue per available room — to $82.64.
The Midwest is expected to perform well this year, too, according to Marcus & Millichap. The company predicts that major hotel completions in Chicago and Ohio will lead to an increase of available rooms of 1.7 percent this year. if the region reaches this percentage, it would mark the highest annual growth of hotel-room supply during the current cycle.
Marcus is predicting, too, that hotel occupancy rates across the Midwest region will rise 30 basis points to 61.7 percent this year.