During the year’s first three months, consumer confidence drove demand for lodging at the strongest quarterly rate since 2015, reports PricewaterhouseCoopers (PwC). Both occupancy and the average daily room rate saw modest growth, and revenue-per-available room increased 3.4 percent.

Reinforced by rising employment, higher real income and increased household net worth, consumer confidence and sentiment remain optimistic, PwC noted.

“Despite the on-going post-election partisanship, the U.S. economy currently appears to be on firmer footing, compared to the same period last year,” said Scott D. Berman, principal and U.S. industry leader of hospitality and leisure for PwC. “Events such as the presidential inauguration and women’s march in January boosted demand for hotel rooms in the greater Washington, D.C. market.

“This, coupled with other anomalies such as timing of Easter and Passover contributed to a good start in 2017. The industry needs to keep its eye on the prize and make sure this momentum can be sustained throughout the rest of 2017.”

Sustaining momentum may prove challenging. The outlook for the remainder of 2017 is predicted to be tempered by price competition in the lodging sector.

PwC’s outlook is based on an economic forecast from IHS Markit, which anticipates the Trump administration will attempt a more modest agenda in 2017 than initially suggested. This may impact previous expectations for significant tax and regulatory reform this year.

Consumer spending will be key driver of economic growth into 2018. Next year, an increased supply of hotel rooms without a similar increase in demand is anticipated to result in the first annual decline in occupancy since 2009. The decline is expected to be minor. Average daily rate growth of 2.2 percent is expected to drive an increase in revenue-per-available room of 2.0 percent, the slowest growth rate in nine years.