Seeing Uncertainty

Could 2020 be the year of reckoning for the hotel industry’s long-running boom?
After a record-breaking period of growth, one word seems to sum up the outlook for the hotel industry in 2020: “Uncertain.” According to Jonathan Hamblett, senior vice president of HRS, the hotel solutions provider, “Uncertain is the word that seems to crop up the most when we consider 2020 projections at this juncture.” The cloudy outlook holds true both domestically and globally, he maintains.

In the US, domestic business travel is steady, but confidence in the year ahead is tenuous, says Hamblett. The US Travel Association, he noted, recently reported that inbound international travel has decreased for the fifth straight month; US-based hotels, which historically gain from higher rates paid by international business travelers, can’t count on domestic volume to pick up that slack.

In fact, when it comes to rates all the major hotel brands are already reporting softness and are projecting a less robust 2020. Operators and distributors of hotels are on the same page. Mary Beth Cutshall, executive vice president for HVMG, a hospitality investment and management company, predicts a gradual slowdown over the next two years. “I don’t think it will be dramatic,” she says, “but I do expect flat occupancy and rate growth will be nominal, as will RevPAR.”

Steve Reynolds, CEO of TripBam, the hotel reshopping solution, says the company is forecasting a “mixed market” with occupancy somewhat flat and rates trending down. In general, he says, clients are seeing a favorable negotiating market and are obtaining better discounts in their top tier cities.

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