Late Cycle, Soft Landing, or Extra Innings – You Pick the Metaphor
Despite the anticipated trends including the opening of new hotels, the softening of occupancy, and the pressure on average growth all coming to fruition, the U.S. hotel industry continues to set performance records, bringing to mind the words attributed to Mark Twain, “the rumors of my demise have been greatly exaggerated.”
Operators, investors, lenders, and consumers are aware of the expectations of a long and stocked pipeline of hotel projects and slowing fundamentals, and braced for lower profits and less transaction activity. To their surprise, in the first half of the year rate growth in some markets exceeded inflation, and absorption of new supply was exceptionally robust in others.
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