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Hotel Growth Could Ease As Supply Picks Up

CALABASAS, CA—“Following several years of rising occupancy, new supply will finally accelerate sufficiently to balance demand,” according to Marcus & Millichap's latest Hospitality Investment Forecast.

By Paul Bubny | paulbubny | Updated on April 06, 2016

A dual-branded Element and Aloft opened in Boston’s Seaport District in February, part of what Marcus & Millichap predicts will be a 1.6% increase in domestic supply this year.

CALABASAS, CA—Last year was one for the record books as far as the US hotel sector was concerned, as it hit new highs in terms of room nights, room revenue and annual occupancy. However, Marcus & Millichap notes that 2015 also set in motion a number of trends which could translate into moderating growth in 2016.

Last year’s supply growth of 1.1% was below the long-term average, yet it marked “the greatest rate of growth during the current expansion,” according to the 2016 US Hospitality Investment Forecast from Marcus & Millichap. “Brands continue to open new locations and a large construction pipeline remains in place, potentially disrupting the performance of existing properties when new rooms come on line.”

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