Hotel Industry Looks Forward to Strong Growth in 2012

The hotel industry will continue to see strong growth in 2012 – Although many economists remain uncertain about the prospects for the American economy in 2012, the hotel industry is expected to see solid growth this year as business travelers and family vacationers continue to demonstrate increased demand for hotel rooms.

This welcome news was provided by the North American Hospitality Review, a monthly report of anticipated hotel bookings and reservations that is organized by Travelclick, Inc. According to the report, occupancy rates are expected to increase by more than three percent this year. In addition, the revenue per available room should improve by an even healthier 5.3 percent.

These latest estimates indicate that growth in the hotel industry, which has improved for the past two years, will continue to be robust. This strong demand, especially from individual business travelers, will put upward pressure on hotel room prices in 2012, helping a hotel industry that has been attempting to recover from the effects of the most recent economic recession

Revenue growth is expected to be particularly strong in the first quarter of 2012, although results are expected to be somewhat more subdued in future quarters due to the relatively weak demand for hotel rooms from group travelers. With the continued uncertainty surrounding the economy, many groups have been reluctant to resume steady travel schedules. However even this segment of the traveling population is expected to slowly improve thanks to a nearly two percent increase in occupancy rates during the current quarter.

Regardless the hotel industry can expected a strong year ahead, especially in improving travel markets like Charlotte, Detroit and Indianapolis. This expected growth is all the more impressive given the fact that many areas of the economy have been unable to rebound from the lack of demand caused by the collapse of the housing bubble and the credit crisis in 2008.

Thanks to the European sovereign debt crisis, many investors have fled to safe assets like Treasury bonds in order to avoid the risks associated with declining economic growth. However the hotel industry should be able to overcome any potential problems thanks in part to the improving strength of corporate America, which has spent much of the past four year working to improve their balance sheets.

Cash holdings by American corporations have increased to nearly $2 trillion. In addition, earnings growth has been strong throughout the past year; in the third quarter, profits earned by American businesses grew by more than 13 percent. In future quarters, many analysts expect companies to utilize some of this cash in areas like business travel and lodging.

Despite all of the uncertain economic news, the hotel industry is becoming increasingly positive about the prospects of a great year in 2012. Not only will this benefit the hotels themselves, it will also help companies like the Hotel Managers Group, which seeks to benefit the hotel industry with the highest level of service and support. The Hotel Managers Group is poised to help hotels improve their business prospects as the industry prepares for continued growth in the coming year.
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