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4 Things To Expect From The Hotel Industry This Year

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Declining RevPAR, major mergers and acquisitions, and the continued growth of home-sharing behemoth Airbnb made for a challenging 2016. Looking ahead, the hotel sector is expected to have a strong year, with new supply and strong demand driving experts' outlook. Here are four trends to keep your eye on.

Push For More 'Airbnb-Proof' Properties

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Hoteliers are aiming to boost the amenity offerings that Airbnb properties lack in a strike against the home-sharing giant and similar services. With hotels losing an average $450M in annual revenues to Airbnb, according to hotel research and marketing firm HeBS Digital's Q1 2017 report, the industry is looking to expand and market those services that are unique to hoteliers, such as guest services, security and safety, and on-site amenities. 

Increased Online And Social Engagement

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Travelers expect hoteliers to have an active presence both online and via social media. Most rooms are booked online, where customers seek out promotions and compare prices for the best deals. Hoteliers are expected to increase their brands' engagement with customers online and via social media. 

 

Strong Demand And Investment

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Hotel demand is greatly influenced by the state of the economy and consumer confidence and spending, which boosts leisure travel. This year's GDP and labor market outlook are strong, which is good news for the industry. Also, the growing expansion of airports and surrounding real estate this year will increase hotel demand as these projects reach completion, according to CBRE's latest 2017 Outlook report. One project, for example, will receive a $6B capital injection from the city of Atlanta and Delta Air Lines to upgrade a variety of terminals and runways in the area within the next 10 years. 

 

Local Supply And Demand Divide

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There are some markets this year at risk of oversupply, including Seattle, Charleston and San Jose. These markets are expected to get a slew of new supply this year that will exceed the forecast number needed, according to CBRE. Other markets, including Philadelphia, Minneapolis and Orlando, will likely have too little supply come online. This will make for divided growth and potential appreciation in the sector this year.