All hail the economy.
Yes, our economy. Despite the persistence of mainstream media, the overall U.S. economy continues to expand and strengthen even as naysayers still look to deliver sensationalistic bad news that is not reflective of the facts.
After all, bad news sells. So the media has a financial incentive to continue perpetuating the myth the U.S. economy is weak. Well that just isn’t true because unemployment is continuing to drop by as much as 250,000 people per month, banks are lending, and manufacturing is soaring. Plus, auto sales and home sales are up while the NASDAQ and NYSE are hovering at record levels.
So it’s time the media starts being more intellectually honest about the truth of the economy.
“This economy of ours is vibrant and has been growing for years,” said economist Alan Beaulieu who is principal of the Institute for Trends Research. “The economy is like a beach ball being held under water, it doesn't want to stay there. During the next few years you will really like life except for a soft spot in late 2014.”
Beaulieu noted the media keeps utilizing phrases like ‘recovering slowly’ or ‘fragile recovery’ which are negatively focused and keep people in a bad head. He said it’s been growing for years and the media is giving out misinformation on a regular basis and it’s time to start changing the terminology being used. The truth is this expert economist said the next four and half years should be good before a moderate recession hits in 2018, but that economic downturn will be nowhere as severe as the one experienced in 2009 and 2009. And this is separate from an extremely healthy hotel economy.
“Until the middle of 2018 life is good, enjoy it, relax,” he said. “Forecast it, any way you slice it and dice it there is a nice future for four and half years as all leading indicators are positive.”
Beaulieu was the keynote speaker at BITAC Owners this morning here at The Breakers hotel in Palm Beach, FL. For those not in the know, BITAC is the industry leading one-on-one meetings and relationship building event. This week marks the 45th BITAC meeting and it attracted the ultimate group of insiders and decision makers representing leading and forward thinking companies. And they’re all here to come together at BITAC to problem solve, network, sign deals and exchange ideas to move forward the quality of experiences for hotel guests, while adding profits to the bottom line. There’s even time to cut loose, be social and network in a luxurious and relaxed environment.
During his discussion Bealieu said natural gas is powering this country economically forward as is wet oil and shale oil. Shale oil is captured by fracking, a relatively new technology changing America’s ability to produce its own energy and lowering dependence on Middle East Oil. The U.S. is now exporting more oil than importing. It’s also having widespread effect in certain state economies such as North Dakota which is going through a massive boom, especially major hotel development in the state as oil companies have flooded the area and need temporary housing for workers and executives. Occupancies are running much higher than industry averages here because of the fracking phenomenon.
Another great aspect regarding the state of the U.S. economy is manufacturing has also returned. And the country’s efforts on sustainability and lowering environmental impact is going so well the country has reduced CO2 emissions back to 1995 levels even as the population continues to soar.
“The U.S. is in a good position and doing the right things by the environment. We don't tell ourselves good news too often,” said Beaulieu.
As for the hotel industry it is continuing to set records. According to STR through end of October occupancy rose 1.4 percent to 64 percent. ADR was up 4.0 percent to $111.00 while RevPAR was up 5.4 percent to $71.00 and room revenue was up 6.1 percent to $105 billion. As of today ADR, RevPAR and room revenue are all at record highs. Yes, higher than before the Great Recession and 2014 looks to be good too.
In 2014 STR predicts supply will grow 1.1 percent as demand grows at more than double the rate at 2.4 percent. That should help drive occupancy 1.3 percent. Expect ADR to increase about 4.6 percent while RevPAR will see an amazing increase of about 6.0 percent.