Excerpt from CoStar
Economist Says Recession Is Unlikely Due to Strong Labor, Income Metrics
Optimism reigned among hoteliers at the first day of The Lodging Conference, as tailwinds outweigh headwinds to the industry.
Group travel is continuing its strong recovery to 2019 levels and the hotel industry is in a good place as this year approaches its final quarter.
But speakers at The Lodging Conference said the economic environment remains a major cause of concern as transactions in the hotel industry remain slim pickings and leisure travel demand starts to plateau.
“Deals are happening, I hear about them every day, but they’re more difficult. They’re more expensive; they’re more restrictive. When will that change? Will it change? Is it the new normal?” said Harry Javer, founder and producer of The Lodging Conference.
With consumer debt in the U.S. at an all-time high of more than $70 trillion, there’s already been decreased spending in lodging accommodations and food services when adjusted for inflation, said Bernard Baumohl, chief global economist for The Economic Outlook Group.
That doesn’t mean consumer spending will halt, leading to a recession in the near future, however. The strength of the job market and increasing household incomes should keep the economy afloat even if there is a cutback on spending, Baumohl said.
“You cannot have a full employment recession; it’s an oxymoron,” he said. “People will cut back on spending, and yes, it's going to have an effect on the economy, but not a recession, not a serious downturn in economic activity.”
Baumohl said he isn't forecasting a recession due to the labor dynamics and international inbound travel opening up.
Click here to read complete article at CoStar.