August 22, 2018

STR Lifts U.S. Projection for 2018, 2019

The U.S. hotel industry is projected to exceed earlier forecasts and continue on its record-breaking performance run through 2019, according to a STR and Tourism EconomicsÕ revised forecast.
For the total year, the U.S. hotel industry is projected to report a 0.6% increase in occupancy to 66.3%, a 2.6% rise in average daily rate (ADR) to US$129.85 and a 3.2% lift in revenue per available room (RevPAR) to US$86.09. RevPAR has grown at least 3% for each year since 2010.

The luxury chain scale segment is likely to report the largest increases in occupancy (+0.9%), ADR (+3%) and RevPAR (+3.9%). While all segments should report RevPAR increases for 2018, the lowest rate of RevPAR growth is projected in the upscale segment (+2%).

Twenty-two of the Top 25 markets are projected to report RevPAR growth for the year. While most markets are projected in the 0% to +5% range, Minneapolis/St. Paul, Minnesota-Wisconsin, and Miami/Hialeah, Florida, are expected to see growth in the range of +5% and +10%. The three markets expected to show a decrease in RevPAR, all between 0% and -5%, are Houston, Texas; St. Louis, Missouri-Illinois; and Washington, D.C.-Maryland-Virginia.

For 2019, STR and Tourism Economics project the U.S. hotel industry to report a 0.2% increase in occupancy to 66.4%, a 2.4% lift in ADR to US$132.97 and a 2.6% rise in RevPAR to US$88.29.

The highest overall rate of RevPAR growth is expected in the independent segment (+2.5%), while the lowest is projected among midscale (+2.1%), upper midscale (+2.1%) and upscale (+2.1%) chains.

Different from 2018, Minneapolis is the lone Top 25 Market projected to report a negative RevPAR percent change for the year. The remaining 24 markets are expected to post growth between 0% and 5%.

ÒRarely do we lift our ADR projections during our mid-year revisions, but stronger-than-expected pricing power over the last quarter has led us to lift our rate forecast by 10 basis points,Ó said Amanda Hite, STRÕs president and CEO. ÒCertainly, inflation plays a role in ADR growthÑinflation-adjusted figures show that ADR has basically been flatÑbut solid economic conditions and an earlier stronger impact from the recent tax cuts are helping to push growth further in the metrics."

Copyright 2018 Marketing & Technology Group. All rights reserved. From By Jeff Weinstein.

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