NATIONAL REPORT—PwC has released its latest U.S. lodging industry forecast, PwC Hospitality Directions U.S.: November 2018. According to the report, waning fiscal stimulus and resultant deceleration in GDP growth are expected to keep a lid on RevPAR increases by the latter half of 2019.
Third-quarter lodging fundamentals came in below the expectations of many, with RevPAR growth of 1.7% year-over-year, led by rate growth of 2.1%. The industry also saw third quarter lodging supply growth (1.9%) outpace demand (1.6%), resulting in occupancy decreasing 0.4%. September lodging results broke the industry’s 102-month streak of consecutive RevPAR gains, dropping 0.3%.
Demand in the top 25 markets decreased year-over-year with a portion of this decline attributable to last year’s hurricane season affecting markets like Houston and Orlando, FL, according to the report.
As we head towards 2019, economic indicators appear to support continued industry growth, given high consumer spending supported by rising disposable income, employment and household net worth, according to the report. PwC cautioned that counter-balances the industry should monitor include continued trade tensions, waning fiscal stimulus, increasing interest rates and growing inflation. Overall, growth in the industry is expected to continued, albeit at a slower pace.