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Fitch Ratings-New York-22 June 2017: Fitch Ratings expects U.S. lodging RevPAR will decelerate in 2H17, but remain positive, allowing the strongest and second longest recovery since 1987 to endure through at least 2018. Fitch expects low single-digit RevPAR growth over the next two years, with resort, suburban and airport locations outperforming due to less new supply. 

"Although leading hospitality and economic indicators are generally positive, market level performance will vary widely and key REIT strongholds like New York and San Francisco will be weak," said Stephen Boyd, Senior Director, U.S. Corporates. "International visitation, corporate industry exposure and new supply will be determining factors."

Generally, currency and rebounding oil prices remain headwinds.

Fitch expects U.S. GDP will grow by 2.1% in 2017 and 2.6% in 2018. While consumer confidence and employment are both positive, rising interest rates are a concern. 

Supply growth will remain at or above demand for the remainder of this upcycle, particularly in the limited service sector. The pipeline of new rooms, including rooms in final planning, is 24% above its prior peak, which could be problematic for specific markets like New York, Nashville, Seattle, Dallas and Miami. 

Banks have reacted accordingly, tightening their commercial real estate standards, particularly for development loans. Although mortgages are generally still accessible, terms are more stringent, pressuring cap rates and valuations. 

The full report, "U.S. Lodging Cycle Concierge," is available at

About Fitch

For 100 years, Fitch Ratings has been making the future a little more predictable through independent and prospective credit ratings, commentary and research. Our global expertise draws on local market knowledge and spans the fixed-income universe. The additional context, perspective and insights we provide have helped the world's investors fund a century of growth.

Contact: Alyssa Castelli / +1 (212) 908 0540

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