The latest lodging forecast from PwC US anticipates much softer growth for the coming year than the consultancy was previously predicting. The new numbers, based on the economic forecast from Oxford Economics, acknowledges that despite a small lift in real GDP for the third quarter, international and domestic uncertainty weigh heavily on the U.S. lodging outlook.
Corporate-transient demand likely will be affected by the U.S. elections, according to the report, as well as by plateauing growth in corporate profits. The strong U.S. dollar, the prospect of the United Kingdom leaving the European Union, economic weakness in the Eurozone, Zika concerns and the lagging energy sector all are factors that PwC expects will lead to continued weakness in lodging-demand growth.
The fact that supply growth will exceed demand growth next year, reversing an eight-year trend, is also a factor - one that will lead to a forecasted drop in occupancy of about a half a percentage point. PwC expects average daily rate to increase by 2.6 percent in 2017 (down from its previously predicted 3.3 percent), and revenue per available room to grow by just 1.7 percent - down more than a percentage point from the previous forecast of 2.9 percent.
It's worth noting that PwC's updated forecast is calling for softer growth than other recent industry updates from STR and CBRE, which predict 2017 RevPAR growth of 2.3 and 2.9 percent, respectively.