Ready for Takeoff: Forecasting Lodging Demand in Airport Markets

With the expansion of major national airports and airport passenger volume expected to increase over the next 10 years, examining the link to forecasting lodging demand is critical to understanding the airport-hotel relationship. LAX provides an illuminating case study.

Airport passenger volume is a key performance indicator for an area's lodging market and tourism economy at large. According to the Federal Aviation Administration (FAA), 31 airports are undergoing renovation or expansion1, including major gateway city airports such as Boston-Logon, O'Hare, and Los Angeles (LAX). Additionally, passenger enplanements are forecast to increase 15% to approximately 857.4 million by 2020, according to the FAA's Terminal Area Forecast database2. With many of the nation's airports expanding and passenger volume forecast to register robust growth, it is important to understand how passenger volume can aid lodging demand forecasting. As a tool to understand this relationship, let's look at a case study of the Los Angeles International Airport (LAX).