NATIONAL REPORT—PwC has revealed its Q1 2019 edition of the PwC Hospitality Directions, and despite continued economic risks, the U.S. lodging industry is expected to stay stable through 2020. Despite near-term risks, solid economic fundamentals support decelerating RevPAR growth in 2019, according to the research.
First quarter results came in below expectations, according to PwC, with occupancy levels up 0.4% and ADR levels up 1.1%, resulting in a RevPAR increase of 1.5%. The industry’s performance in March was a concern, as a favorable calendar comparison (Easter week was at the end of March last year, ending April 1) was expected to result in stronger metrics. However, March saw occupancy flat and ADR-driven RevPAR up just 0.6%.
PwC noted that RevPAR growth in 2019 is expected to continue to slow, driven almost entirely by growth in ADR.
Looking ahead to the remainder of 2019, the near-term U.S. lodging outlook remains stable, according to the report, with unemployment expected to reach a cyclical low this summer at around 3.5%; continued, albeit decelerating GDP growth; tepidly rising inflation expectations; and softening, yet continued growth in consumer spending.
The company noted that counter-balances to this outlook include continued trade tensions and effects from possible tariff-rate implementation, heightened political uncertainty, slowing economic growth, and tempered investor confidence.