Strong supply growth and consumer uncertainty will steadily shrink U.S. occupancy levels, according to a forecast from CBRE Hotels Americas Research. Occupancy will fall 0.1 percent in 2019 and decline another 0.6 percent in 2020 and 1.9 percent in 2021. It will rise again in 2022, by 0.8 percent. CBRE anticipates that average daily rate will grow 2.6 percent in each 2019 and 2020 and that the growth then decelerate to 1.3 percent in 2021.
Senior managing director of CBRE Hotels Americas Research Mark Woodworth said that despite a "softening" of the U.S. lodging industry, occupancy will remain historically high and profit margins will continue to increase. "The growth story may not be as strong as hoteliers would prefer, but I would hardly classify hotel sector performance as poor," Woodworth said.
The economy and luxury segments will exhibit the best average annual ADR growth over the next five years. Economy will edge up 1.8 percent, while luxury will grow 1.7 percent. The upscale and upper-upscale segments each will grow 1.2 percent.
Demand will vary: Upscale will grow 3.7 percent while economy will fall 0.4 percent. Midscale will see a 0.4 percent bump, and upper-upscale will rise 2.4 percent.