STR and Tourism Economics again have revised downward their U.S.
hotel forecast for revenue per available room (RevPAR) in 2019 and 2020.
In their final forecast for the year, STR/Tourism Economics said
they expect RevPAR to grow 0.8% for 2019 and 0.5% for 2020 -- the lowest growth
rate since the Great Recession of 2008.
STR/Tourism Economics had previously forecasted that U.S. hotel
RevPAR would increase 1.6% and 1.1% for 2019 and 2020, respectively.
"U.S. hotels have posted nine straight years with RevPAR
increases of basically 3% or higher, so growth levels below 1% will clearly
represent the industry’s worst years since the recession," said STR president
Seattle (minus-4.1%) and New York City (minus-3.5%) are
projected to have the U.S.'s steepest RevPAR declines for 2019, and RevPAR in the
country's Top 25 markets in aggregate is expected to dip 0.5%.
For this year, STR estimates that U.S. hotel occupancy will
be down 0.2%, while average daily rate (ADR) will grow 1%. Supply is expected
to increase 2% and demand is predicted to be up 1.8%.
For 2020, U.S. occupancy is projected to fall 0.4%,
concurrent with a 0.9% increase in ADR. Supply is expected to grow 2% and demand
"The major factor in our revisions continues to be a lack of
pricing confidence," Hite added. "Supply growth is coming in ahead of demand
growth a bit sooner than expected, so occupancy levels are slightly lower than
projected, and ADR has grown below the level of inflation for five consecutive