Latest news with #consumerSentiment
Skift
3 days ago
- Business
- Skift
U.S. Hotels Face a Challenging Landscape This Year
The DJIA fell 299 points, the Nasdaq was down 180, the S&P 500 fell 50 points and the 10-year treasury yield was down .06 to 4.39%. Lodging stocks were modestly in negative territory on the day. In 2025, the U.S. lodging sector faces a challenging landscape, characterized by a combination of macroeconomic and capital market factors, according to PwC. As a result of the macroeconomic headwinds, GDP in 2025 is expected to grow by 0.7%, compared to 2.5% in 2024, on a fourth-quarter over-fourth-quarter basis. Inflation is anticipated to rise 2.7% in 2025, which, coupled with geopolitical uncertainties, is expected to significantly influence consumer behavior, particularly impacting the lower-priced chain scale segments. As a result, PwC expects RevPAR growth to decelerate significantly to 0.8%. The key risks continue to be on room night demand, just as lodging supply growth is reverting to its long-term average of ~2.0%. Key demand performance trends and risks include: International leisure travel has declined noticeably, marked by a 3.3% drop in visitors in the first quarter compared to last year. In contrast, inbound corporate travel has improved, with a 10% and 17.4% increase from Europe and Canada, respectively. Domestic leisure travel growth has slowed significantly due to a combination of inflation concerns and declining consumer sentiment, while domestic corporate travel is showing mixed results, with stable premium offerings and group travel demand despite softened lower-tier demand. Hotel operating performance continues to be bifurcated, with luxury hotels outperforming economy properties. YTD through April luxury RevPAR grew by 7.1%, while economy hotels saw only a 0.9% increase, compared to the same period last year. Despite a slowdown in hotel development, upscale segments continue to see new projects. PwC's outlook anticipates significant deceleration in travel demand in Q2, with expected positive momentum recommencing in the second half of 2025. As a result, PwC expects RevPAR in the second quarter to decline by 1.2% year-over-year, driven primarily by occupancy. PwC also expects RevPAR in the third and fourth quarters to increase by 1.1% and 1.8% respectively. For 2026, global events like the FIFA World Cup could boost tourism. HHM Hotels announced the Courtyard by Marriott Philadelphia Downtown has announced a new name following an all-encompassing property renovation that included the renovation of every guestroom and public area of the hotel. Formerly the Le Meridien Philadelphia, the 202-room hotel features an onsite restaurant and bar, 9,165 square feet of flexible event space, a fitness center, and an onsite market. Hilton's Canopy brand has made its debut in Nashville, Tennessee. Located in the city's Gulch district, Canopy by Hilton Nashville The Gulch features 181 rooms, including 27 suites and five distinctive dining experiences. Hotel Indigo Nashville - The Countrypolitan has completed the second phase of its multi-year transformation. This latest phase included a full renovation of all 134 guestrooms and suites, modernization of the hotel's 6,500 square feet of meeting and event space, and a new fitness center. This renovation completes The Countrypolitan's upgrade to an authentic Nashville experience. HEI Hotels & Resorts has added Waymore's Guest House and Social Club in Nashville to its growing portfolio of upper-upscale independent boutique hotels and resorts throughout the United States. Owned by L+R Hotels, Waymore provides 93 rooms, approximately 4,200 square feet of meeting space, and two F&B outlets. Margaritaville Hotel Kansas City, in Kansas City, Kansas, will host a ribbon cutting and preview event today. The 229-room hotel will start taking reservations on July 1. The hotel will feature an indoor pool, an outdoor resort-style pool, retail and family entertainment centers, along with a bar and grill. The historic Casa Marina Hotel, in Jacksonville Beach, Florida, is under contract to be sold, according to News4JAX. The property has a planned renovation for 2026. It's unclear when the pending sale will be finalized. The Avila Village Inn, in Avila Beach, California, has unveiled an expansion that blends upgraded guest amenities with thoughtfully designed new accommodations. The boutique property has added 18 brand-new rooms in the Forest Building and completed enhancements to its original 30 rooms in the Craftsman Building. Hotel El Roblar, in Ojai, California, is reopening on June 19, according to the Ojai Valley News. Eric Good, Jeremy McBride, Warner Ebbink and Ramin Shamshiri purchased the property and transformed Hotel El Roblar to highlight its Spanish Revival and early Californian architecture while updating its bones. The revamped hotel remains an intimate property, featuring only 50 rooms. There are 31 rooms in the main house, 11 rooms are bungalows, and eight rooms are in a new building on the property called the Sycamore House. There's also a pool, gym, treatment room, and event space. The first patients will be seen in early 2025 inside the new Sanford Orthopedic Hospital, which will open a boutique hotel inside at the same time. Located in Sioux Falls, South Dakota, the nine-story building will have 35 rooms to serve patients both before and after procedures, 12 operating rooms, and an intra-operative MRI attached directly to an OR. The building also includes the new Highpoint Hotel, a boutique hotel with high-end finishes and amenities developed and operated by Hegg Cos. The lobby is on the fourth floor, which includes a fireplace, an expanded gym, and a bar. The 56 guestrooms are on floors six and seven, while the fifth floor eventually will be built out as 19 inpatient hospital rooms. The hotel expects to start accepting reservations in mid-October and open for the first guests on January 12, 2026. HREC Investment Advisors arranged the sale of the 149-room Sonesta Select - Kansas City Airport Tiffany Springs located in Kansas City, Missouri. The property was acquired by KMG Hotels. HREC Investment Advisors exclusively represented an affiliate of Service Properties Trust, as the seller in this transaction. Personnel News Noble Investment Group announced the addition of Tim Bowes and Mark Klawitter to its asset management leadership team. Bowes will help lead asset performance across Noble's upscale select-service hotel portfolio, partnering with operating teams to implement innovative strategies that unlock value. Most recently he served at Hospitality Investors Trust, a Brookfield company. Klawitter will help spearhead execution across Noble's branded long-term accommodations platform, guiding initiatives that drive revenue, profitability, and operational innovations. He most recently served at Extended Stay America. Europe Highlights Together with landlord Vasakronan, Scandic plans to open a modern, new 236-room hotel in downtown Uppsala, Sweden. In addition to a gym, bar, and flexible meeting facilities, the new hotel will offer a large restaurant. The property is being developed as a mixed-use building, combining both hotel and office spaces, which means that hotel guests and office tenants will share the lobby and entrance areas. Construction is scheduled to begin in the autumn of 2025, with the grand opening planned for the second quarter of 2028. In the UK, the design overhaul of the Malmaison, on Newcastle's Quayside, will see a £3m refurbishment to revamp all of the hotel's 122 bedrooms and suites. The company had initially planned a £2m refurbishment program, but a more ambitious scheme has now been announced. The project is being phased in to minimize disruption and is expected to be completed later this year. Hilton is planning to build a new hotel with 142 rooms in Shropshire, England. Telford & Wrekin Council has signed an agreement with Hampton by Hilton for a six-story hotel within the town's new Station Quarter. A provisional opening date of 2027 was given.
Forbes
4 days ago
- Business
- Forbes
Economic News Has Started Catching Up To Sentiment
Young woman buying in supermarket and feeling worried about increase in food prices. For many months, there has been a sense of surprise, sometimes bordering on incredulity, as people forged on even during economic turmoil and uncertainty. They worked, they spent, they paid down debt when pandemic relief funds came in. There's been a general sense that things were improving, that the economy would have its soft landing. However, that is no longer clear. Consumer sentiment has been sliding on the whole for a while, and some economic data is starting to come in line with how people have been feeling. An economic soft landing means a gradual lowering of inflation while sustaining reasonable economic growth and employment. It's the best possible outcome, but doubts have crept in. The talk started in earnest in the fall of 2023, although even then there were signs of potential long-term disturbance. By January 2025, worries about inflation (because all the previous high inflation had accumulated without equivalent boosts in the incomes of most) started to raise the question of whether the soft landing was still possible. Concerns have percolated out to consumers, which can be seen in various ways. One example is the use of credit. When cash was available from the federal pandemic response, people paid down their use of credit, suggesting that, when possible, they'd rather control expenses. Today, use of credit cards and other forms of revolving credit are at historical levels, as this graph from the Federal Reserve Bank of St. Louis shows. Credit card and other revolving credit plan usage. The patterns suggest that when people can afford to turn away from credit, they do. When use sharply rises, it might be a sign of growing confidence among people who know they can pay their bills, but then why would they need higher levels of credit? Another indicator is consumer sentiment. The University of Michigan has a long history of collecting and analyzing survey data on the topic through the University of Michigan, Survey Research Center, Surveys of Consumers, including its index of consumer sentiment. The index's normalized value is the first quarter of 1966; each measure is effectively a comparison to that time period. Indexes provide ways to compare values of something at different times in apples-to-apples comparisons. The graph below is a combination of data from May and June in 2025 from the research center and archived values stored by the St. Louis Fed. Consumer sentiment measurement from the University of Michigan. Vertically shaded strips represent recessions. The June index value isn't an historical low, possibly because of recent news stories that might suggest greater economic stability to come. However, from the left-hand side of the graph in 1978, even a 60.5 index, and the overall drop since 2020, is a notable plunge. Some developing data shows that information like growing credit use and consumer sentiments — the latter important because about 69% of GDP is consumer spending — may have been early warning signs. Retail sales were down 0.9% month-over-month, not the median projection of 0.6% as surveyed by Dow Jones. Retail sales minus autos were down 0.3%, not up the projected 0.1%. The import price index was flat, not down 0.1% as projected. Rather than dropping 0.1%, industrial production fell by 0.2%. 'U.S. consumers held on much more tightly to their wallets in May,' as BMO Economics Chief U.S. Economist wrote on Tuesday, June 17, 2025. 'Caution escalated last month as tariff uncertainty and a softening labor market took a toll on consumers' willingness and ability to spend.' Oxford Economics said that an apparent U.S.-China trade war 'détente' in May took downward pressure off industrial production. But higher oil prices and a tax proposal 'deterring inward foreign direct investment' are new risks and production was down 0.2% month-over-month and not the expected 0.1%. And the home builder confidence index, from the National Association of Home Builders and Wells Fargo, rather than rising from 34 to 35, fell to 32. Anything below 50 is falling confidence. The potentially scary issue is that there may be little to nothing most consumers, businesses, and even government can do.
Yahoo
6 days ago
- Business
- Yahoo
'It makes sense to be on hold': Why Wall Street strategists think Fed rate cuts aren't coming anytime soon
It's been an encouraging week for economic data, with inflation showing signs of moderation and consumer sentiment rebounding for the first time this year. The labor market remains broadly stable, with the unemployment rate holding at a healthy 4.2%, although a recent uptick in continuing jobless claims suggests some signs of cooling. Altogether, the backdrop appears supportive of the Federal Reserve's path toward easing. But Wall Street watchers say policymakers may need more convincing before delivering any cuts. Read more: How the Fed rate decision affects your bank accounts, loans, credit cards, and investments "We don't know really how the second half of the year is going to play out," Loretta Mester, former Cleveland Fed president, told Yahoo Finance on Thursday. Mester added that although the "hard" economic data, like the recent labor and inflation reports, have been encouraging, "the real question is what is going to happen in the second half of the year and [if] those trends continue. That's where the high level of uncertainty still is with us." The uncertainty centers on the scope and scale of President Trump's tariffs in the aftermath of his April "Liberation Day" announcements, which sent shockwaves through markets and businesses. Since then, many of those "reciprocal" tariffs have been paused, but the 10% baseline duties for most countries remain in place. The president is set to notify US trading partners of their respective unilateral tariff rates in the coming weeks. Read more: The latest news and updates on Trump's tariffs In the meantime, Mexico and Canada continue to face fentanyl-related tariffs, and industry-specific tariffs on steel, aluminum, and autos remain unchanged. Earlier this week, the US and China agreed to a framework and implementation plan aimed at easing tariff and trade tensions. President Trump signaled his approval, saying the deal was "done," pending final sign-off from him and Chinese President Xi Jinping. As part of the agreement, Trump said the US would impose a total of 55% tariffs on Chinese goods. Many market observers said the deal was sparse on details. Outside analysts like the budget lab at Yale have calculated the effective tariff rate on China overall to be around 33%. "The Fed is on hold until we get a little more clarity about not only the magnitude of the tariffs and the breadth of the tariffs, but what effect they all have on inflation and what effect the tariffs and other policies, including the budget bill, will have on growth and employment," Mester said. Despite the words of caution, markets are increasingly confident that rate relief is on the horizon, with nearly 70% now betting the Fed begins easing in September, up from 60% a week ago. Investors are putting a roughly 25% chance on the first cut arriving as soon as July, according to CME Fed projections as of Friday afternoon. Still, markets have almost fully priced in that the Fed will hold rates steady at next week's policy meeting. Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management, said any rate cuts before September would likely require significant labor market deterioration. He also cautioned that the inflation threat hasn't disappeared, especially with tariff effects still uncertain. "People are suggesting that maybe the tariffs won't have an inflationary impact. I think it's too early to decipher that," Schutte said. "All the inventories that have been pulled forward by importers, by consumers, by businesses to actually steady and ready themselves for the tariffs may be impacting the inflation data right now. It often has taken time in the past for that to show up in the actual numbers." He added that the Fed is in a "wait-and-see time period." "That's where I don't think the Fed likely cuts until September, unless you see significant weakening in the labor market, and then the question is always: Is it too late or not?" HSBC US economist Ryan Wang acknowledged the "double-sided risks" tariffs pose, noting that while goods prices will likely continue to rise through the rest of the year, early signs of a cooling labor market could help offset that by exerting downward pressure on inflation. But while markets may be betting on a smooth path to cuts, Wang warned the Fed will need confidence that inflation isn't rising in an "uncontrolled fashion" and that activity in the broader economy isn't slipping too quickly. "The benign version of rate cuts will take time to develop," he said. For now, the Fed appears firmly in a holding pattern — acknowledging the encouraging data, but not yet convinced it's time to shift course. Allie Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
14-06-2025
- Business
- Yahoo
America's deepest inflation fears are starting to fade
Americans are feeling better about the path forward for inflation. The latest University of Michigan consumer sentiment survey released Friday showed pessimism over the inflation outlook lessened in June, as one-year inflation expectations plunged to 5.1% from the more than four-decade high of 6.6% reached in May. Long-run inflation expectations, which track expectations over the next five to 10 years, also fell, hitting 4.1% in June, down from 4.2% in May. The broader consumer sentiment index rebounded as well, rising to 60.5 in June, above the 52.2 seen in May, which had been one of the lowest readings on record. "Consumers appear to have settled somewhat from the shock of the extremely high tariffs announced in April and the policy volatility seen in the weeks that followed," Survey of Consumers director Joanne Hsu wrote in the release. Our Chart of the Week shows inflation expectations coming off the boil. Put simply, expectations for price increases are more tempered than they were a month ago, but they are still not as optimistic as they were six months ago. But this framing — "better than feared" — is the story of what's brought the S&P 500 (^GSPC) back near all-time highs. Like consumers, investors made peace with these disappointments and welcomed the improvements that followed. Tariffs are still higher than Wall Street expected coming into the year, but not as high as the peak fears seen in April. The Federal Reserve is expected to cut interest rates later this year, but not by as much as hoped last year. By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Strategists are growing more bullish on stocks, though the median S&P 500 target among strategists sits at 6,100, well below the 6,500 seen in December. However, no fewer than 11 Wall Street firms cut their S&P 500 targets as markets sold off in April; at least eight of these firms have since raised their outlooks again. Both groups, consumers and investors, ultimately ask themselves the same two-part question: Are things going well now? And are they getting better or worse? It's the latter that usually moves the needle. Click here for in-depth analysis of the latest stock market news and events moving stock prices Sign in to access your portfolio
Fast Company
13-06-2025
- Business
- Fast Company
Consumer sentiment rises in June—the first time in 2025 as tariffs, inflation worries improve
Consumer sentiment increased in June for the first time in six months, the latest sign that Americans' views of the economy have improved as inflation has stayed tame and the Trump administration has reached a truce in its trade fight with China. The preliminary reading of the University of Michigan's closely watched consumer sentiment index, released Friday, jumped 16% from 52.2 to 60.5. The large increase followed steady drops that left the preliminary number last month at the second-lowest level in the nearly 75-year history of the survey. Consumer sentiment is still down 20% compared with December 2024. 'Consumers appear to have settled somewhat from the shock of the extremely high tariffs announced in April and the policy volatility seen in the weeks that followed,' Joanne Hsu, director of the survey, said in a written statement. 'However, consumers still perceive wide-ranging downside risks to the economy.' Americans have largely taken a darker view of the economy's future after President Donald Trump unleashed a wide-ranging trade war, imposing steep tariffs on China, the European Union, and dozens of other countries. Yet in April Trump postponed a set of sweeping tariffs on about 60 nations and last month reached a temporary truce with China, after both sides had sharply ratcheted up tariffs on each other. The Conference Board's consumer confidence index, released in late May, also increased after five straight declines that were linked to anxiety over tariffs. U.S. duties remain elevated compared with historical levels, but so far they have not worsened overall inflation. Prices rose just 2.4% in May compared with a year ago, up slightly from 2.3% in April. Still, most economists expect tariffs to hit harder in the coming months. Consumer confidence is sharply divided by political outlook, with Republicans feeling much better about the economy under Trump than Democrats. Democratic sentiment about the economy was much higher under Biden, while Republican views were low. This month, however, sentiment did improve among supporters of both parties and independents. Consumers' inflation expectations — basically a measure of how worried people are about future inflation — dropped this month, which will be welcomed by the inflation-fighters at the Federal Reserve. Inflation expectations can become self-fulfilling, because if people worry price increases will get worse, they can take steps — such as demanding higher pay — that push prices even higher. The Fed meets next week, and is expected to keep its key short-term interest rate unchanged at about 4.3%.
