STR and Tourism Economics made minimal adjustments to growth projections in the first U.S. hotel forecast of 2024 just released at the Americas Lodging Investment Summit (ALIS).
For 2024, growth in average daily rate (ADR) was raised by 0.1 percentage points, while occupancy and revenue per available room (RevPAR) were unchanged from the previous forecast. For 2025, growth projections for each of the key performance metrics were downgraded due to the long-term, average trends beginning to stabilize: occupancy (-0.1 ppts), ADR (-0.3 ppts) and RevPAR (-0.5 ppts).
“U.S. ADR and RevPAR reached record highs in 2023 with solid travel fundamentals and a big year for group business underpinning performance,” said Amanda Hite, STR president. “We expect to see continued growth as fundamentals remain more favorable for the travel economy. The indicator that is especially important is the low unemployment rate among college-educated individuals, those most likely to travel for business and leisure.”
“The economic outlook has improved, but we still expect a deceleration in economic growth, characterized by softer labor markets and business sector caution,” said Aran Ryan, director of industry studies at Tourism Economics, “Modest lodging demand growth will be supported by household prioritization of travel, a continued rebuilding of business travel and group events, and a rebound in international visitation.”
“We anticipate GOPPAR to grow as a result of improved TRevPAR levels coupled with stable labor costs,” said Hite. “Among the chain scales, luxury and upper upscale hotels are projected to see the largest increases in those costs as a result of growing group demand.”
Copyright 2024 CoStar Group. All rights reserved. From https://www.str.com.