Every fall, we at TravelPlex don our Nostradamus hat and, with the assistance of numerous sources, attempt to forecast various industry growth – and potential declining – statistics.

The 2018 predictions for the U.S. hotel industry have just been released and all projections indicate continued growth, however, at a slower pace than in recent years.

The outlook for the hotel industry continues to be marked by uncertainty related to consumer confidence, employment levels, GDP growth and U.S. governmental policies directed to the hotel sector. Increasing labor costs are also expected to continue to affect hotel profit margins.

Following is a related article from Business Travel News...

U.S. Hotel Industry Forecasts Project Modest Growth for 2018 

By Julie Sickel of Business Travel News

New 2018 forecasts for the U.S. hotel industry project continued growth, though at a slower pace than in recent years.

CBRE's most recent forecast pegs 2018 average daily rate growth at 2.3 percent and, despite a projected imbalance in supply and demand, predicts occupancy will edge up 0.1 percent year over year. "The limited growth rates may be disappointing or even troubling for some industry participants," said Mark Woodworth, senior managing director of CBRE Hotels' Americas Research. "However, 2018 will mark the ninth consecutive year of rising occupancy, something we have not seen since the 1990s."

PwC, meanwhile, projects 2018 ADR will grow a more modest 2.1 percent year over year and occupancy will decline 0.1 percent. The forecast anticipates both supply growth and demand growth will peak during the first quarter of 2018 and taper out for the remainder year. PwC predicts supply will crest at 1.9 percent and demand at 1.8 percent.

STR forecast ADR will grow 2.5 percent and occupancy will decline 0.2 percent. It projects supply growth of 2.1 percent and demand growth of 1.9 percent.

The outlook for the industry continues to be marked by uncertainty related to consumer confidence, employment levels, GDP growth and U.S. governmental policy. Additionally, increasing labor costs are expected to continue to weigh on hotel profit margins. "In a low revenue-growth environment, it is a struggle to grow profits," Woodworth said. "This is especially true given the labor shortages and resulting upward pressure on compensation rates that our clients are reporting to us."

CBRE projects revenue will increase 2.3 percent, but at that rate, expense growth would need to stay below 3.7 percent in order for profits to rise, Woodworth said. "With the average hourly compensation rate for hospitality employees currently increasing at a pace of 4.1 percent and labor costs comprising roughly half the costs of a hotel operation, you can see how the math becomes challenging."

Nevertheless, Woodworth said, the challenge is not a new one for hoteliers, and he expects hotel operators will be able to manage costs in order to grow profit once more in 2018.

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