The US Hotel Industry First Negative Growth

In the United States, tourism demand is not high. According to the American Tourism Association report, the US domestic tourism index showed a significant decline in September, and it is expected that the future growth rate will remain stable until the first quarter of next year.

The US hotel industry had to start to face the bitter consequences of the global economic growth. In the last quarter, the US hotel occupancy rate hit the second biggest drop since the 2008 economic crisis, breaking the growth momentum in the seven quarters. This decline has sounded the alarm for the leisure and hospitality industry.

According to Hospitality Net, CBRE‘s hotel consulting team said that since the third quarter of 2016, the quarterly growth rate of hotel room demand in the United States has declined for the first time, less than the quarterly increase in supply. The national occupancy rate fell 0.4% year-on-year, the largest decline since the first quarter of 2016 and the second largest decline since the 2008 crisis.

The disappointing hotel industry data illustrates the weak expectations of the US economy in 2019. On the one hand, the demand for tourism in the United States has declined. On the other hand, due to factors such as the global economic situation, the demand for tourism from abroad has also decreased.

Hotel industry data has fallen sharply

The data shows that in September 2018, the US hotel industry’s RevPAR, the average revenue generated per room, showed its first annual growth rate decline in 102 months. In the third quarter, the annual growth rate of hotel demand in the country increased by 1.6%, which was lower than that in the second quarter and lower than the supply growth rate of 2.0% in the quarter.

At the same time, the national hotel occupancy rate fell by 0.4% in the third quarter, the largest decline since the first quarter of 2016.

In the third quarter of last year, Hurricane “Elma” attacked Florida and Texas, causing unusual demand for hotel rooms, which CBRE considered to be part of the decline in data for the same period in 2018. Despite this, the weakening of the occupancy rate in the third quarter of 2018 is not only in the above two places, but also in the Midwest and East Coast cities.

According to CBRE, 34 of the 60 markets tracked saw a decline in occupancy in the third quarter, an increase of 15 from the second quarter.

In addition, some of the top hotel groups in the United States have also released poor reports.

Marriott International reported that the Group’s RevPAR growth rate in North America in the third quarter of 2018 was only 0.6%, while Marriott’s global RevPAR increased by 1.9%.

Excelle Hotels Group reported that RevPAR in the third quarter of 2018 fell by 1.1%, while RevPAR worldwide rose by 2.8%.

Hilton Hotels Group also said that the Group’s global RevPAR growth rate in the third quarter of 2018 was higher than that of the US.

Hotel industry data may reflect the weakness of the economy

Wall Street has previously mentioned in the member-only article “The Cup is just a microcosm that the world’s five-star hotels are facing a real storm.” The top international hotel groups in the United States have been working hard to expand their international markets for several years. The reason behind this is that the US hotel industry may have reached the turning point of the rising cycle.

Hülya Karahan: the Founder