The Hotel Sector continues to perform better than expected. According to STR data, U.S. hotels saw a 3.5 percent increase in revenue per available room during the first quarter of 2018. This exceeded the 2.5 percent increase that was widely predicted. The demand growth in the first quarter of 2018 marked the 33rd consecutive quarter of demand growth. Looking forward to 2019 the experts predict another year of occupancy growth that will mark 10 consecutive years of increases in occupancy and 5 consecutive years of record occupancy levels.
2018 Forecasted Increases
Supply – STR: 2.0% PwC: *
Demand – STR: 2.3% PwC: 2.0%
Occupancy – STR: .3% PwC: .1%
ADR – STR: 2.4% PwC: *
Rev Par – STR: 2.7% PwC: 2.4%
Hotel supply growth is expected to grow 2.5 percent in 2018, according to Lodging Econometrics equating to 1,146 hotels with 130,877 new rooms. Of those expected to open, 511 hotels with 50, 105 rooms will be uppermidscale, the highest count of any chain scale and 45 percent of all new openings.
It is a great time to be a Hotelier in the United States as the economy will be approaching a record 10 years of consecutive growth in 2019. If this holds true this will be the longest consistent economic growth for the United States surpassing the “Roaring 1920’s” era. As a result of such a bright future we have all kinds of Buyers wanting to purchase hotels. Some of these Buyers are coming from different industries as they need to deploy their money. Many of them are all cash buyers or are needing a replacement property to finish their 1031 tax deferred sale.