THE U.S. HOTEL industry is projected to see an overall performance growth of 2 percent for 2019 rather than the 2.3 percent previously forecast, according to STR and the latest Tourism Economic forecast. Growth will slow to 1.9 percent by next year, STR and TE expect.
The industry is projected to report a 0.1 percent increase in occupancy this year to 66.2 percent, with a rise of 1.9 percent to $132.32 in ADR and an increase of 2 percent in RevPAR to $87.65.
“The first quarter of the year came in worse than forecasted on the ADR side, and while the indicators point to better performance the remainder of this year, we lowered our RevPAR projection 30 basis points mostly as a result of Q1 performance,” said STR President and CEO Amanda Hite.
Among the top 25 markets, the majority are projected to register RevPAR growth in the range of 1 percent to 3 percent. Three markets – Atlanta, San Francisco/ San Mateo and Tampa/St. Petersburg, are expected to fall within a growth range of 3 percent to 7 percent.
Houston, Miami/Hialeah, Minneapolis/St. Paul, Philadelphia and Washington, D.C, are likely to see a year-over-year RevPAR comparison between -2 percent and 1 percent.
Among chain scales, the Economic Segment, Luxury chains, and Independents are expected to report the largest increases in occupancy, ADR, and RevPAR respectively.
The forecast for 2020 remains mostly the same. But it projects a year over year decrease in occupancy, 0.2 percent to 66.1 percent, for the first time since 2009.
ADR is expected to increase 2.2 percent to $135.17 and a 1.9 percent lift in RevPAR to $89.36.
The luxury segment expects the highest overall rate of up 2.2 percent while the lowest, up 1.4 percent, is projected among Midscale chains.
STR also found that three hotel companies exceed 500,000 rooms in North America. The top three parent companies with largest room counts between the U.S., Canada, and Mexico are Marriott International with 8886,308 rooms, Hilton with 703,238 rooms and Wyndham Hotels & Resorts with 546,716.
These three hotel companies’ portfolios represent 34 percent of the almost 6.3 million rooms in North America.The same three have dominated the building pipeline for the past year and a half at least.
“Brands have been a favorite of lenders for the better part of the last three decades, and North America was the starting point for the brand proliferation that has occurred around the globe. With most of the development pipeline focused in the branded segments, especially in limited-service chains, brand presence is only going to grow,” said Vail Ross, STR’s senior vice president of global business development and marketing. “The concern, of course, will be on how much new inventory these industry segments can absorb without a negative impact on supply – the limited-service sectors in the U.S. are a good example of this right now.”