by Michael J. Shapiro | June 07, 2018
The U.S. lodging industry continues to enjoy record-breaking numbers and will likely do so through 2019, according to a revised forecast from STR and Tourism Economics
 
"Revenue-per-available-room growth exceeded expectations during the first quarter of the year and lifted our projections for 2018 as a whole," noted Amanda Hite, STR's president and CEO. That said, the forecast calls for some year-over-year occupancy declines in the fourth quarter, as the figures will be compared to the post-hurricane occupancy surge in 2017. Those declines could extend into 2019 and cause the overall annual performance next year to take a hit.
 
"Regardless," continued Hite, "industry fundamentals continue at record levels supported by strong demand from both the business and leisure sectors. Solid economic indicators and a room construction total that represents just 3.6 percent of existing supply certainly help marketplace conditions as well."
 
The latest forecast calls for a 2 percent supply increase for 2018, which will be surpassed by a 2.4 percent jump in demand. Occupancy growth is expected to be just 0.4 percent, but average daily rate is forecast to rise by 2.5 percent for the year, with a 2.9 percent increase in RevPAR. If that holds, it would be the first year since 2009 that RevPAR growth does not reach 3 percent.
 
The growth is expected to slow in 2019; however, the forecast calls for demand growth to continue to outpace that of supply, at 2 percent vs. 1.9 percent. Occupancy is forecast to be relatively flat, at just 0.1 percent growth, accompanied by a 2.3 percent jump in ADR and 2.4 percent RevPAR growth.
 
Every Top 25 Market is expected to enjoy positive RevPAR growth this year, with the exception of Houston. For 2019, Minneapolis is the only market in the top 25 expected to see a year-over-year drop in RevPAR.