The U.S. hotel industry is expected to end 2010 with stronger performance in all three key measurements than previously predicted, according to Hendersonville, Tenn.-based Smith Travel Research.

Smith Travel predicts 2010 occupancy to increase 1.9% to 55.8%, average daily rate (ADR) to decrease 2.3% to $95.45, and revenue per available (RevPAR) room to end the year virtually flat with a 0.5% decrease to $53.22.

Supply in 2010 is projected to grow 2.2% and demand is expected to rise 4.1%.

“We think the recovery will pick up its pace during the second and third quarters of this year, then it will moderate,” said Mark Lomanno, Smith Travel’s president, in a statement.

The forecast for 2011 predicts the industry to end the year with increases in all three key performance metrics: Occupancy will increase 1.9% to 56.8%; ADR will rise 3.5% to $98.79; and RevPAR will be up 5.4% to $56.12.

Supply in 2011 is projected to be up 1% and demand is expected to increase 2.9%.

“The takeaway is that 2010 is going to be significantly better than [hoteliers] thought it would be, and they plan their strategies accordingly,” Lomanno continued. “It won’t be back to 2007 or 2008 levels, and there will be easy [comparisons to last year]. 2011 will be a good year on top of a good year, and that is something we haven’t seen in awhile.”