Hotel Profitability Shaky?

STR says RevPAR grew 3.2 percent in 2016 but will only grow 2.5 percent in 2017 and 2.6 percent in 2018. Also, expect occupancy to get a little shakier as more supply enters the market. “It is not great, or bad, just OK,” says Frietag.

Mark Woodworth, President of PKF Hospitality Research, (PKF-HR), a CBRE company, said this year hotel supply is expected to outstrip demand. “This is the first time we are seeing this during the upcycle,” he says, noting that 2016 was a year when hotel occupancy was at its highest level ever.