The average U.S. hotel will suffer a 1.6% decline in operating profits this year, the first decline since 1991, a prominent hospitality research firm has projected.

PKF Consulting of San Francisco forecasts that a combination of declining occupancy and sluggish growth in room rates will lead to revenue growth of just 0.2% by yearend. That rate is not only "anemic" but a full two percentage points below the estimated rate of inflation, PKF said. Hence, hotels will have difficulty cutting costs, and profitability is expected to fall.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.