STR and Tourism Economics have revised their joint 2018 and 2019 forecasts for the U.S. hotel industry, noting that record-breaking performance is expected to continue through 2019.
“Rarely do we lift our ADR projections during our mid-year revisions, but stronger-than-expected pricing power over the last quarter has led us to lift our rate forecast by 10 basis points,” STR president and CEO Amanda Hite said.
Between the last forecast update in June and this most recent one, average daily rate growth projections have increased from 2.5 percent to 2.6 percent for 2018 and from 2.3 percent to 2.4 percent for 2019. The forecast for occupancy growth has inched upward from 0.4 percent to 0.6 percent for 2018 and from 0.1 percent to 0.2 percent for 2019.
"Certainly, inflation plays a role in ADR growth—inflation-adjusted figures show that ADR has basically been flat—but solid economic conditions and an earlier stronger impact from the recent tax cuts are helping to push growth further in the metrics," Hite said.
Demand, too, has been revised upward, from 2.4 percent to 2.6 percent in 2018 and from 2 percent to 2.1 percent in 2019. Hite added that the positive uptick in wages and low unemployment and growth in GDP "are all good signs for the continued health of the industry through at least 2019."