Second Quarter 2016 U.S. Hotel MarketView

 

OVERVIEW

  • Demand growth recovered from the first quarter to produce all-time-high record occupancy.
  • RevPAR growth of 3.5% was low in nominal terms but solid in real terms.
  • The weakening dollar helped exports, but higher oil prices could not reverse a slowdown in industrial production.
  • Labor markets are virtually unchanged since the first quarter; personal income growth is weak.
  • ADR growth compressed across markets, with Oakland in the lead for the second straight quarter.
  • Q2 2016 hotel investment rose slightly from the prior quarter, but remained tepid compared with 2015. The quarter’s acquisition total of $6.9 billion reflected a 46.4% year-over-year decline.
  • Single-asset acquisitions were more resilient with a less severe drop of 19.1%.
  • RevPAR growth outlook is 3.6% for 2016 and 3.9% for 2017.
  • Supply growth outlook is slightly lower at 1.6% for 2016.
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