STR and partner Tourism Economics now predict 1.6 percent RevPAR growth for 2019 and 1.1 percent for 2020, down from a forecast of 2 percent growth this year and 1.9 percent by the next.

STR LOWERED ITS U.S. hotels performance forecast for the next two year during its 11th annual Hotel Data Conference in Nashville, Tennessee, Thursday. The announcement kicked of a conference full of predictions that an economic downturn is very likely by 2020 are shortly thereafter.

STR and partner Tourism Economics now predict 1.6 percent RevPAR growth to $87.41 for 2019 and 1.1 percent to $88.40 for 2020, down from a forecast of 2 percent growth this year and 1.9 percent by the next. Occupancy is forecast to remain flat, 0.2 percent growth to 66.3 percent in 2019 and down 0.3 percent in 2020 to 66.1 percent, and ADR is expected to see 1.4 growth both years.

“We continue to see ADR rise below the level of inflation even as the industry operates in the highest demand and occupancy environment in history,” said STR’s President and CEO Amanda Hite. “The absence of hotelier pricing confidence has even extended into the peak summer months, leading us to downgrade our ADR projections by 50 basis points for 2019 and 80 basis points for 2020. Those projected decreases correlate with a downgraded GDP forecast and lead to an obvious reduction in our RevPAR projection.”

Hotel room supply is expected to grow 1.9 percent both year while demand may drop from 2.1 percent this year to 1.6 percent in 2020. Some markets and segments, particularly select-service, have felt negative effects from supply catching up with demand.

“We’re still in a RevPAR growth cycle for now, but driving profit is a real challenge for many properties around the country,” she said.

Vail Ross, STR’s senior vice president for business development and marketing, set the tone for the conference during the opening session by pointing to the 0.4 percent dip in RevPAR growth seen in June as a sign of bad things to come. The 2.9 percent RevPAR increase recorded in both 2018 and 2017 was the lowest RevPAR percentage change for the country since the last recession.

“From the preliminary numbers of what we see, in July the story will probably remain the same,” Ross said. “It is an indication that supports the storyline that we are seeing a national slowdown.”

Other forecasts for 2019 are for RevPAR growth of 3 percent or more for four of the top 25 markets: Atlanta, Georgia; Tampa/St. Petersburg, Florida; San Francisco/San Mateo, California; and Nashville, Tennessee. In 2020 Miami and San Francisco are predicted to see RevPAR growth of 3 percent or higher while New York is the only of the major markets forecasted for a RevPAR decline.

The economy segment is expected to see the largest increase in occupancy in 2019, up 1 percent, while the luxury segment will see the most ADR growth, 2.4 percent, and independents are forecast to see the highest RevPAR increase, 2.4 percent. The lowest RevPAR growth for this year, 0.3 percent is projected for the upscale segment.

In 2020, STR and Tourism Economics predict the luxury segment will see the highest growth in RevPAR, up 1.8 percent, and upscale will again see the lowest growth, 0.4 percent.

Earlier this week, STR announced that the Baird/STR Hotel Stock Index fell 1 percent in July after a 6.2 percent increase in June.