September 18, 2018
How hoteliers navigate evolving distribution channels
A panel at the Hotel Data Conference discussed the various distribution channels available to hoteliers and the benefits and challenges they offer.Read more
Strong economic indicators in Q2, coupled with accelerating group demand, suggests sustained momentum for the lodging sector through 2019.
Second quarter fundamentals remained positive, as consumer confidence continued. Q2 results yielded strong demand for hotels, outpacing increases in supply, as well as the highest Q2 increase in ADR since 2016. A year-over- year comparison for the second quarter shows US RevPAR increasing 4.0 percent, led by rate growth of 2.9 percent.
Continued growth in demand led to a midyear year-to-date occupancy of 65.9 percent. Holiday shifts with Easter week ending on Sunday, April 1, contributed to a positive second quarter RevPAR performance. Group demand increased 2.1 percent for the first half of this year compared to the same period in 2017. Commercial transient demand continued to increase, albeit at a slower pace than the prior year. As demand increases for both segments and continues to apply pressure on occupancy levels in many markets, our 2018 forecast anticipates an increase in pricing power for hotels, resulting in an ADR-driven RevPAR growth of 3.3 percent, driving improved flow through for hotel operators.
Looking ahead to 2019, there is an expectation of continued confidence by hoteliers as increases in room rates continue to become a bigger driver of RevPAR growth. Consumer spending is forecasted to increase as lower personal tax rates and low unemployment continue. The industry is expected to continue to benefit from an improving economy stemming initially from the Tax Cuts and Jobs Act, with potentially higher group spend and increased commercial transient demand.
Get the full story at PwC (PDF 145 KB)
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