STR, TE lower U.S. hotel growth projections in final forecast of 2018
For the total year, the U.S. hotel industry is projected to report a 0.4% increase in occupancy to 66.2%, a 2.6% rise in average daily rate (ADR) to US$129.99 and a 3.0% lift in revenue per available room (RevPAR) to US$86.00. RevPAR has grown at least 3.0% for each year since 2010.
The Luxury, Economy and Independent chain scale segments are likely to match for the largest increase in occupancy (+0.7%). Luxury is expected to post the highest growth rates in ADR (+3.5%) and RevPAR (+4.2%). While all segments should report RevPAR increases for 2018, the lowest rate of RevPAR growth is projected in the Upper Midscale segment (+1.7%).
Twenty-three of the Top 25 Markets are projected to report RevPAR growth for the year. While most markets are projected in the 0% to +5.0% range, five are expected to see growth in the range of +5% and +10%: Chicago, Illinois; Miami/Hialeah, Florida;Minneapolis/St. Paul, Minnesota-Wisconsin; Philadelphia, Pennsylvania-New Jersey; and San Francisco/San Mateo, California. The two markets expected to show a decrease in RevPAR, each between -5% and 0%, are Houston, Texas, and Washington, D.C.-Maryland-Virginia.
For 2019, STR and Tourism Economics project the U.S. hotel industry to report a 0.1% increase in occupancy to 66.2%, a 2.3% lift in ADR to US$133.04 and a 2.4% rise in RevPAR to US$88.07.
The highest overall rate of RevPAR growth (+2.3%) is expected in the Luxury, Midscale and Independent segments, while the lowest (+1.9%) is projected among Upscale and Upper Midscale chains.
Different from 2018, Minneapolis is the lone Top 25 Market projected to report a negative RevPAR percent change for the year—this is due largely to the difficult-to-match comparison with the Super Bowl year. The remaining 24 markets are expected to post growth between 0% and 5%.
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