Commercial Investment Real Estate September/October 2019 | Page 33

Riding a decade of
growth in occupancy
and revenue, the
hospitality sector
remains attractive
to investors, despite
warning signs.
by Sarah Hoban
T
he hospitality sector had a banner year in 2018. Travel research firm STR reported that U.S. hotel revenues reached
$218 billion, an all-time high, up $10 billion from 2017. House profit — despite increasing labor costs — also topped
records at $80 billion. Occupancy and revenue per available room, or RevPAR, have grown each year over the last decade.
In its Hospitality North American Investment Forecast for this year, Marcus & Millichap predicted a 66.5 percent occu-
pancy rate — an increase of 0.3 percent over 2018 and a 30-year record high.
But exciting numbers like these are tempered with a matching underlying concern: How long can this last? And what
challenges might be ahead?
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