PARSIPPANY, N.J. — STR and Tourism Economics lowered their year-over-year growth projections in the revised 2023-24 U.S. hotel forecast presented at the recent 15th annual Hotel Data Conference.
For 2023, growth in Revenue Per Available Room (RevPAR) was lowered by 0.5 per cent, due to a 0.6- per-cent downgrade in occupancy growth. While that RevPAR growth remains above the long-term historical average, most of the increase was frontloaded to the early portion of the year. For 2024, the RevPAR growth projection was also lowered 0.5 per cent on a 0.5-per-cent downgrade in occupancy. Average Daily Rate (ADR) was upgraded 0.1 per cent for 2023 but kept flat for 2024.
“We brought down our growth projections with the industry in a period of normalization,” says Amanda Hite, president of STR. “Last quarter, demand underperformed projections in the luxury segment with travellers pulling back on their leisure spending or opting for overseas trips, as well as the midscale and economy portion of the market due to recessionary effects. There have been conflicting signs of economic slowdown and the impact on consumer sentiment, but hoteliers remain optimistic, especially those in the middle-to-higher end of the market. A lot of the normalization we have seen in the data supports that optimism with a steady uptick in business travel and continued improvement in the major markets. ADR growth rates have moderated as the impacts of inflation and record-breaking leisure travel have waned, but our forecasted growth rates are still skewed toward the upper-end hotels with a rate-focused performance strategy.”
