Lodging industry performance reports and forecasts published this week by research firms showed continued weakness. They are the latest data points reflecting or predicting a general softening, including for business travel.

For the week ended Nov. 17, STR reported lower U.S. occupancy (down 1.9 percentage points year over year to 64.2 percent), a slightly lower average daily rate (to just under $130) and a 4.2 percent drop in revenue per available room. October was the second-consecutive full month for which STR recorded declining RevPar. That hadn’t happened since December 2009 and January 2010.

STR now expects the 2020 average U.S. daily rate to rise by less than 1 percent and occupancy to fall by less than a percentage point. It also expects RevPar to grow by less than 1 percent for full-year 2019 and 2020. The industry has not experienced RevPar growth of less than 2.9 percent for a full year since the 2007-2009 recession, the firm noted. According to senior VP of consulting and analytics Carter Wilson, “There’s more evidence for a pronounced slowdown on the horizon.”

In another forecast issued this week, CBRE Hotels Research said occupancy rates across the United States would “dip slightly” through 2021. Like STR, CBRE now expects RevPar during that time to grow by less than 1 percent annually. Citing supply growth, low inflation, “competition from the sharing economy” and the “expansion of intermediaries in the sales process,” it also reduced its forecasts for average rate growth to less than 1.5 percent through 2022.

“By our measure, the U.S lodging industry reached the peak of its current cycle in 2018,” according to CBRE senior managing director Mark Woodworth. “History calls for a downturn in 2020 or 2021.”

Christopher Nassetta, Hilton president and chief executive officer

In late October, Hilton CEO Christopher Nassetta told Wall Street analysts that the company expected 2020 RevPar to be flat or marginally higher. “Businesses don’t like uncertainties when they are trying to make decisions on hiring more people, investing in plant equipment technology and making bigger decisions that drive investment and drive demand for hotel rooms,” Nassetta said. Referencing Brexit, trade wars and underlying economic trends, he said, “The caution flags are out.”

Marriott CEO Arne Sorenson also said international trade dynamics were causing apprehension among U.S. business leaders. Acknowledging only a few corporate accounts had completed negotiations, Sorenson on Nov. 5 told analysts he expected 2020 corporate rates to rise by “low-single digit” percentages.

Booking volumes through global distribution systems have been slipping. Sabre on Oct. 31 reported that “the overall GDS market has declined the past three quarters. … The GDS market continues to be sluggish, and we expect this trend to persist into 2020.”

Amadeus this month reported a 0.8 percent overall drop in global travel agency air booking volume during the first nine months of the year. In the third quarter, the decline was 1.1 percent. Amadeus blamed “macroeconomic developments and geopolitical events.” The North America market, though, saw “modest growth.”

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