Meeting Mentor Magazine

July 2024

U.S. Hotel Industry Ends 2017 on Record High

The U.S. hotel industry recorded its best year ever in 2017, according to data from STR, the global hospitality research company. Occupancy, average daily rate (ADR) and revenue per available room (RevPAR) reached the highest levels that STR has ever benchmarked. Compared to 2016, occupancy rose 0.9 percent to 65.9 percent; ADR grew 2.1 percent to $126.72; and RevPAR increased 3 percent to $83.57.

According to STR, the U.S. hotel industry also broke records for both supply (about 1.87 billion room nights available) and demand (roughly 1.23 billion room nights sold). Demand increased by 2.7 percent, outpacing supply, which grew by 1.8 percent — the highest since 2009.

“The industry outperformed projections and reached record-breaking levels across the metrics in 2017,” said Amanda Hite, STR’s president and CEO. “Late-year demand growth, which was no doubt boosted by post-hurricane business in Houston and several major Florida markets, pushed well past a healthy influx of new rooms entering the marketplace. That allowed the industry to end the year well above forecasted levels after seeing more modest rates of growth through the first half of 2017.”

What’s ahead for 2018? “Given the tax cut and the stronger GDP growth that is expected, U.S. hotels are in a solid position moving through the next year,” Hite said. “Construction activity is on the decline for the first time since 2011, so even as demand growth subsides, the effects on occupancy and rates should be more manageable for hoteliers.”

The Americas Lodging Investment Summit in January saw the release of STR and Tourism Economics’ latest forecast for 2018. The forecast predicts continued growth for the U.S. hotel industry: Occupancy is expected to increase 0.3 percent to 66.1 percent; ADR is forecast to rise 2.4 percent to $129.77; and RevPAR is expected to rise 2.7 percent to $85.82. RevPAR, the forecast notes, grew at least 3 percent each year from 2010 to 2017. —Regina McGee

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