Skift Take
The hotel industry is expected to have a slowdown in profits this year, yet companies keep starting new brands and expanding existing ones. Where is this optimism coming from?
Every January, about 3,000 hotel executives, owners, developers, and management companies gather in Los Angeles to make pronouncements about the health of the industry and their goals for the year.
While hotel companies always say that they are optimistic about the future—they’re making more deals, creating new brands, expanding existing brands—the numbers tell a murkier story.
Industry research firm STR and Tourism Economics released its first forecast of 2020 this week at the Americas Lodging Investment Summit (ALIS).
For the first time since 2009, the U.S. hotel industry is likely to have flat growth in revenue per available room, or RevPAR, a key metric.
STR revised its predictions from its previous forecast in November, when it predicted increases in RevPar of 0.5 percent in 2020 and 0.7 percent in 2021. Now, it is saying there will be no growth this year and 0.5 percent growth in 2021.
STR president Amanda Hite said 2019 was the worst year since the recession in terms of RevPar growth, coming in at 0.9 percent after nine years of increases of 3 percent or higher.
The good news, she said, is that demand is still high so hotels are selling rooms. Looking at the situation relatively, RevPar growth may be slowing but that’s on top of increases over the last few years that were at record high levels.
Despite the tepid outlook for 2020, hotel executives and developers said this week that they will continue to forge ahead with plans to start new brands and expand existing ones.
Here are five takeaways from the 2020 ALIS conference.
Another Brand is Born
Hilton stole the thunder from some of its competitors by announcing its new lifestyle brand Tempo by Hilton at a splashy affair in New York City on Jan. 16. Hilton, as usual, was present in full force at ALIS this year showing off Tempo. But its competitors were not to be outdone.
Choice Hotels International introduced Everhome Suites, an all-new construction midscale extended stay brand with customizable, apartment-style accommodations.
The company on Tuesday broke ground on the first Everhome Suites in Corona, California. It has agreements for 13 hotels in Austin and Los Angeles. The first Everhome Suites will open in 2021.
CEO Pat
