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Another Recession to Strike in 2 Years

LOS ANGELES—According to economist John Silvia at ALIS 2015, hotel revPAR growth peaks in the middle of the cycle, not at the end, which indicates that we may be heading for another recession in the next 2 years.

By Kelsi Maree Borland | Updated on January 28, 2015

LOS ANGELES—We may be heading for another recession in the next two to three years, according to chief economist for Wells Fargo, John Silvia, who recently spoke at ALIS 2015 in Downtown Los Angeles. Talking to a room of hotel executives, Silvia pointed out that revPAR growth peaks in the middle of a cycle, not at the end, indicating that we may be close to the next recession.

Silvia pointed out that peaks come at mid-cycle because by the time developers realize demand has increased and begin construction, we are already at the middle of the cycle. With revPAR peaks happening now, that indicates we are about two or three years away. However, this will likely be the best year in the economic cycle.

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