NASHVILLE -- After enjoying growth in revenue per available room (RevPAR) for roughly eight consecutive years, the hotel industry’s streak might be coming to an end -- or at least slowing -- according to analysts at the 10th annual STR Hotel Data Conference here.
For 2018, STR predicts RevPAR growth of 3.2%, and 2.6% growth in 2019.
"When I look at the industry, things are positive and
where we are today is very similar to where we were last year," said STR
president and CEO Amanda Hite. "But there are more macroeconomic concerns
that we're starting to lend more weight to."
Among other things, she cited a looming trade war and recent
"front-loaded" tax reforms, among other factors.
"It could go either way, but I think it's going to
start to slow down, and we've got to be prepared for that," she said. "We
have to see where it's going to start impacting consumers and travelers."
Hite also expressed concern over the U.S. losing share to
other countries when it comes to international arrivals. Prior to 9/11, she
recalled, the U.S. was the destination of choice for roughly one in six trips,
while today, it's one in eight. Likewise, the industry continues to be plagued
by labor issues: Low unemployment makes it a challenge to source talent, and
labor-related expenses remain high.
Meanwhile, with the U.S. economy having been in growth mode
for so long, many are anticipating a leveling off in the near future.
"There will be another cycle," asserted Isaac
Collazo, vice president of competitive intelligence for InterContinental Hotels
& Resorts, in HDC's opening session. "We're in the second-longest
economic cycle this country has ever had since the 1900s, and you expect at
this point for there to be some sort of downturn. While we continue to see some
sort of a growing economy, what you can expect to see, both globally and on the
U.S. side, is that it is cooling. There is somewhat of a softer environment
coming at us in 2019."
In addition to slowing RevPAR growth, STR expects the
average daily rate (ADR) to advance 2.4% for 2019, versus a 2.6% gain for 2018.
Supply is forecasted to increase 1.9% in 2019, compared with 2% growth for this
year, and demand will expand 2.1%, versus 2.6% growth for 2018. Occupancy is
slated to grow 0.2% for 2019, compared with 0.6% growth this year.