So far, the year 2017 has been a robust one for the hotel industry in the United States, which has seen a moderate level of growth in demand that has led to increases in both hotel occupancy and the average daily rate (ADR) paid by guests, and as if the project pipeline in the country is any indication, the United States will likely remain to have a dynamic year as we get well into November 2017.
To put things in perspective, in 2017 revenue per available room (RevPAR) in the United States has seen a rise of 3.4 percent and 2.7 percent in the year’s first two quarters, while the industry has also benefited from a healthy stock market in the country, too. Meanwhile, a look at the global hospitality industry’s project pipeline by region for November 2017 shows the Americas (which are traditionally driven almost entirely by hotel growth in the United States) leading the way with 87 projects set to debut to the public during the month, according to information taken from the TOPHOTELCONSTRUCTION database. The next closest region — as is often the case — is the Asia Pacific region, where there are 66 hotel projects opening this month for guests. Just to give this context, it is important to note that Europe is third with 46 projects, while the Middle East is right behind with 43, and Africa is last with 11. All told, the global hospitality industry will be adding 253 new hotels with a total of 53,404 rooms, with Double Tree by Hilton ranking as the leading brand for the month by adding 11 new hotels with its name. The other brands in the top three are Hilton’s Garden Inn with 10 and Radisson Blu with 9.
Experts predict that the economy in the United States will continue to function well for the foreseeable future, because both consumer and business spending are projected to remain strong, keeping the country on solid economic footing as 2017 concludes and we head into 2018. One model even forecast’s the country’ total domestic product (GDP) to grow a healthy 2.7 percent (annualized rate) during the third quarter of 2017, numbers for which will be available soon.
The lone caution for hotel owners and operators in the United States is that peaking supply growth continues to serve as a meaningful downside risk, which puts pressure on pricing power and can ultimately lead to tempered performance, although that certainly won’t show in the United States’ project pipeline for months, if not years, to come.