Hotel Crystal Ball
Mark Woodworth and Robert Mandelbaum (snapped in their Atlanta office last week) are noted seers of the industry: president and research director, respectively, of PKF Hospitality Research. They tell us they’ve seen decades of lodging cycles—but never anything this good. As we enter 2015, they predict demand will continue to outstrip supply, pricing power will remain firmly in the hands of sellers, and record occupancy and profit (now in their fourth year of double-digit gains) are likely to go on two or three more years.
Every way you slice the numbers tells the same story, they say, reflecting general trends in the economy. Demand for upper-priced properties tends to be influenced by changes in income, and demand for more moderately priced accommodations is driven by employment. Their national forecast: a 7.1% increase for revenue per average available room. Fastest-rising market: Oakland. Weakest: a tie between Norfolk and Pittsburgh.
PKF is a venerable institution, formed in 1911 at the original Ritz-Carlton in NYC. Originally it was an accounting firm focused on the lodging industry. In 1991, its management practice spun off as PKF Consulting. Today it maintains the largest database of hotel performance financial info, which it’s been publishing annually since 1936. In July of this year it was acquired by CBRE, and now is working closely with that firm’s brokerage, capital markets and valuation advisory practices. We don’t know if there’s a common theme to the knickknacks on Robert’s shelf, but we think it suggests he knows a lot of stuff.