Last year turned out to be a better year for the U.S. hotel industry than previously thought, thanks generally to a stronger economy, lower unemployment and higher consumer confidence. That has left hoteliers to wonder now whether the industry will have a repeat performance in 2018.

To gauge where the U.S. hotel industry is headed, Hotel News Now requested first-quarter forecasts for 2018 from STR (parent company of HNN), PwC and CBRE. We then asked their experts to provide some guidance on what those forecasts mean. The sources are optimistic about the hotel industry, but that optimism is tempered by the challenges the industry faces going forward.

“CBRE Hotels’ Americas Research is forecasting U.S. RevPAR to increase by 3.7% in Q1 2018, equal to our forecast for RevPAR growth in Q4 2017. We see slightly greater ADR lift in Q1 2018 (+3.2%) than in Q4 2017 (+2.7%). The sustained, record occupancy levels are expected to finally boost pricing power as the domestic economy continues to expand, and business and consumer confidence further elevates. The Index of Leading Economic Indicators published by The Conference Board began increasing at an elevated rate since February 2017. Lodging demand typically responds six to eight months later. These are good signs for U.S hoteliers.

“Increasing home prices and the significant increases achieved in the stock market have contributed to a substantial enhancement of the wealth effect. This will continue to contribute to greater levels of leisure travel. Also, in select southern markets, the ongoing remediation of the damages brought by the hurricanes of 2017 will result in greater levels of rooms sold throughout most of the first quarter of the new year.”