Recession Looms, Yet US Hotel Forecast Stays on the Positive Side

STR and Tourism Economics made changes to the 2023 United States hotel outlook during the Americas Lodging Investment Summit.

The current year occupancy projection was lower than expected by 0.1 percent. However, projections for revenue per available space (RevPAR), and average daily rate (ADR), were raised by 0.5 percent each.

According to the forecast, U.S. hotel occupancy rates will rise to 63.6 percent by 2023. ADR will grow by 2.1 percent and RevPAR will increase by 3.7%.

"Even if the anticipated recession is more on the shallow side, performance growth in 2023 will be pretty remarkable," STR president Amanda Hite mentioned. "Gains are slowing, however, with inflation rising at a faster rate than ADR. Demand continues to trend at record levels with continued strength in the leisure segment as well as a substantial return in group business."

STR and Tourism Economics provided a slight upgrade to their 2023 forecast. However, they also made subsequent downward adjustments for 2024. The RevPAR was 0.4 percent lower after the forecast for next year included a 0.3 percentage downgrade in occupancy and an ADR lift of 0.1 percent.

Despite this update, U.S. occupation is expected to rise to 65.3 percent next, with ADR expected to increase by 3.8 percent, and RevPAR expected to increase by 6.6 percent.

"While improving, a deficit persists in business travel - a segment that is especially important for the upper-tier classes," Hite continued. "Overall, much of the industry is in a solid position to navigate choppy waters ahead, and we will even see a return to the year-over-year benchmark as the pandemic calendar comparables are behind us."

The data showed that RevPAR had been fully recovered on a nominal basis in 2022, but that it will not reach that level when adjusted for inflation until at least 2025.

 

Source: travelpulse.com