THE PACE OF THE
SLOW DUE TO
A VARIETY OF
It’s no secret that the hospitality sector has been riding an epic wave of success in recent years. Occupancy has
reached historic highs while profitability
has skyrocketed. Plus, soaring economic
indicators and expected increases in metrics for hotels bode well for the future.
But all good things must come to an end
and hospitality executives know that a downturn is likely to happen. The good news is
that while growth is expected to slow, the
decline won’t be seismic.
Supply growth, while a concern, is relatively in check and, perhaps in preparation
for the inevitable, hoteliers have kept their
costs low. However, several trends—
including shifts in technology, demographics and
inventory options—promise to disrupt the
industry, for better and for worse.
“The US lodging industry achieved
growth in all top line operating statistics, and
every significant metric completed 2016 at a
record level,” states LW Hospitality Advisors’
Q1 2017 Major US Hotel Sales Survey.
Yet the analysts maintain a cautious out-
look for the sector, due in part to increases
in new supply in major US markets, the
rise of alternative accommodations and
the softening of income growth and prop-
erty values. The upside is that US con-
sumer confidence is at a 16-year high, sur-
passing pre-2008 levels and rivaling the
heady days of the dot-com boom.
US hoteliers are coming off of seven consecutive years of rising profits, reports CBRE
So while there is reason to exercise caution, some analysts say there’s no need to
worry. “We’re clearly at the peak of the
cycle; we’ve been hovering there for the
past two to three years,” says R. Mark
Woodworth, senior managing director and
Two Roads Hospitality offers unique experiences at each of its hotels to foster a sense of place. At
Terranea Resort, guests can participate in whale watching and coastal guided hikes along the Palos
Verdes Peninsula and California cuisine and wines dominate the menu.
By Rayna Katz