PwC Hospitality Directions US: May 2019

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Despite continued economic risks, the US lodging industry is expected to remain on stable footing through 2020.

Despite near-term risks, solid economic fundamentals support decelerating RevPAR growth in 2019.

  • First quarter results came in below expectations, with occupancy levels up 0.4%, and ADR levels up 1.1%, resulting in a RevPAR increase of 1.5%. Of particular concern was the industry’s performance in March, where a favorable calendar comparison (Easter week was at the end of March last year, ending April 1) was expected to result in stronger metrics. However, March numbers were disappointing, with occupancy flat and ADR-driven RevPAR up just 0.6%.
  • RevPAR growth in 2019 is expected to continue to slow, driven almost entirely by growth in ADR.

Looking ahead to the remainder of 2019, the near-term US lodging outlook remains stable, with unemployment expected to reach a cyclical low this summer at around 3.5 percent. Other predictions:

  • continued, albeit decelerating GDP growth
  • tepidly rising inflation expectations
  • softening, yet continued growth in consumer spending

Counter-balances to this outlook include:

  • continued trade tensions and effects from possible tariff-rate implementation
  • heightened political uncertainty
  • slowing economic growth
  • tempered investor confidence

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 when working on:

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

Contact us

Steven J. Barr

Consumer Markets Leader, PwC US

Eric Shin

Consumer Markets Tax Leader, PwC US

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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