Healthy business and leisure demand is helping the industry achieve strong fundamentals, including peaking average daily rates (ADR) (+2.4 percent 2017 YTD October) and revenue per available room (RevPAR) (+3.0 percent 2017 YTD October). Hovering around 66 percent, occupancy seems to have hit a peak. Some industry analysts, however, consider the prolonged strength of the hotel sector to be a cause for concern. Historically, hotel performance has proven to be cyclic, with long runs of growth often followed by intense downturns. With the last down cycle occurring in 2010, some speculate soft market conditions to be imminent, particularly because cycles generally occur every 10 years. However, despite pockets of uncertainty, those bullish on future hotel performance seem to outnumber industry detractors. While positive signals continue to emanate from the broader hotel industry, some local markets may continue to face signi cant hurdles in 2018. In New York and Chicago, for example, hotels are struggling to drive up room rates in a market ooded with new supply. In fact, since 2008, the number of hotels in New York City has grown 55 percent to 634 properties and 115,000 rooms. Already competing with a rise in private accommodation rentals, hoteliers aiming to keep their properties full must o er attractive rates. These local market conditions are weakening growth, and in order to cope with the oversupply issue, some hoteliers are resorting to cutbacks around service, maintenance, and even lobbying with city o cials for property tax reform. Download the full report at Deloitte (PDF 1.6 MB)