Hotel Investors, No Need to Worry Yet

Berman: “Based on a strong Q4, we are encouraged by the trends we are seeing as we head into 2017.”

NEW YORK CITY—In spite of predictions that the hotel sector’s performance would finally start declining in 2017 after several years of record highs, a variety of indicators from the fourth quarter of last year set the stage for continued revenue per available room growth this year, according to an updated lodging forecast by PwC US. Strong industry performance in Q4 2016—including encouraging trends in demand and average daily rate—coupled with a post-election surge in consumer and business sentiment that contributed to improving economic conditions,

PwC expects the increase in supply of hotel rooms to marginally outpace growth in demand, resulting in a decline in occupancy to 65.3%. Aided by an expected increase in corporate transient demand, growth in average daily rate is expected to drive a RevPAR increase of 2.3%, according to the report.