PwC Hospitality Directions US: January 2019

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Our US 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 percent, driven by an average daily rate increase of 2.0 percent.
  • Despite concerns over the impact from the trade tensions with China and rising construction/labor costs, the US lodging industry ended 2018 on solid footing, with occupancy reaching levels not seen since 1981.

Lodging supply is expected to increase at a rate close to the long-term average; however, 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.

Counter-balances to this outlook to be watchful of include any negative near-term impact from the partial US government shutdown, continued trade tensions and effects from tariff-rate implementation, political uncertainty amid partisanship, and increasing interest rates.

About Hospitality Directions

PwC Hospitality Directions US is a near-term outlook for the U.S. lodging sector, commonly used by industry decision-makers and stakeholders to better understand the impact of policy and other macro-environmental factors on the sector’s operating performance. Our outlook includes metrics for the overall sector as well as for the chain scales, and is used by our clients for

  • strategic planning and capital
  • allocation purposes
  • demand and supply
  • occupancy 
  • average daily rate 
  • revenue per available room 

Contact us

Steven J. Barr

Consumer Markets Leader, PwC US

Tel: +1 (415) 498 5190

Eric Shin

Consumer Markets Tax Leader, PwC US

Tel: +1 (646) 471 0902

Ron Kinghorn

Consumer Markets Advisory Leader, PwC US

Tel: +1 (617) 530 5938

Melissa Palmer

Consumer Markets Assurance Leader, PwC US

Tel: +1 (617) 530 4473

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