Coming off the heels of a lackluster performance for the sector in Q4 2015, average daily rate growth in the rst quarter was the lowest since Q4 2013. Overall, the US lodging industry appears to have transitioned to a phase of the current cycle where occupancy levels have stabilized and average daily rate is the primary driver of still meaningful, albeit decelerating, RevPAR growth. While overall demand conditions in the US are expected to remain favorable, driven, in part, by rming group travel, increasing supply growth in many markets is expected to contribute to stabilizing occupancy levels. Average daily rates are expected to continue to increase, but at a slower pace than previously expected, impacted, in part, by lower GDP growth. Demand growth is expected to slow in 2017, just as the pace of supply growth accelerates above the long-term average for the rst time since 2009. As a result, our outlook anticipates occupancy levels to decline, but still remain near peak levels. Average daily rates are expected to continue to grow, although at a decelerating pace, driving a more modest RevPAR increase of 3.7 percent. Download PwC's Hospitality Directions: May 2016 (PDF 188 KB)