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This is What Weak Corporate Transient Demand Looks Like Up Close

BETHESDA, MD—The first full year of RevPAR declines will hit in 2018, Fitch Ratings predicts in a new report.

By Erika Morphy | erikamorphy | | Updated on August 03, 2016
The Waldorf-Astoria New York The Waldorf-Astoria New York

BETHESDA, MD—As second-quarter earnings come in, most lodging companies are reporting that corporate transient demand, or business travel outside of conference bookings, is weak. Fitch Ratings confirmed this trend with a new report noting that US lodging fundamentals are decelerating and, more ominously, signs of fatigue are signaling a negative turn could be ahead.

Fitch has revised downward its prediction for RevPAR based on recent trends. It now projects that US RevPAR will increase by 3%-4% during 2016 and by 1%-2% during 2017, with monthly comparisons possibly turning negative during the latter half of the year.

The first full year of RevPAR declines will hit in 2018, Fitch predicts, assuming the historical six-to-12-month lag relationship between occupancy and RevPAR declines holds.

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