PwC: U.S. Lodging Industry Remains Stable

NATIONAL REPORT—PwC has released its latest U.S. lodging industry forecast in the “January 2019 PwC Hospitality Directions U.S.”

According to the company, the U.S. lodging outlook remains stable, driven by a continued increase in consumer spending; increasing, albeit decelerating business investment; and relatively strong consumer confidence. Despite near-term risks, solid economic fundamentals support decelerating RevPAR growth in 2019.

Fourth quarter lodging fundamentals came in just below expectations, with year-over-year RevPAR growth of 2.4%, driven by an average daily rate increase of 2.0%.

Despite concerns over the impact from the trade tensions with China and rising construction/labor costs, the U.S. lodging industry ended 2018 on solid footing, with occupancy reaching levels not seen since 1981, according to PwC.

The company also noted that lodging supply is expected to increase at a rate close to the long-term average, but tightening financing conditions and further increasing labor/construction costs may cause a drag on supply growth. Overall, RevPAR in 2019 is expected to increase at a decelerating pace, driven exclusively by growth in ADR.

Potential counter balances to watch include any negative near-term impact from the partial U.S. government shutdown, continued trade tensions and effects from tariff-rate implementation, political uncertainty and increasing interest rates, PwC noted.