Hospitality Directions, the lodging forecast released by PricewaterhouseCoopers (PwC), reports that U.S. occupancy levels have begun to stabilize after reaching peak levels in 2015. While overall lodging demand remains positive thanks in part to the popularity of group travel, heightened supply growth is expected to contribute to the stabilization. The report follows less the lowest ADR in the final quarter of 2015 since 2013.
“Despite a weaker than expected first quarter, overall demand for hotels in the U.S. is expected to remain strong,” says Scott D. Berman, PwC’s principal and U.S. industry leader, hospitality and leisure. “And with economic growth anticipated for the remainder of the year, we expect room rates to reset to local market conditions.”
Although the pace of supply growth has accelerated above the long-term average for the first time since 2009, PwC anticipates demand growth to slow in 2017. ADR is expected to continue growing, albeit at a decelerated pace.
Oxford Economics predicts real gross domestic product to grow nearly 2 percent this year, measuring the estimation on a fourth-quarter-over-fourth-quarter basis drawn from factors such as solid labor market gains, positive consumer spending, and low inflation.
