NEW YORK — Leisure travel demand continues to drive U.S. hotel performance and it isn’t expected to drop off anytime soon.
“We knew leisure led the recovery beginning last year, but to see that occupancy from leisure travelers maintain on the weekends has been pretty surprising,” said Amanda Hite, STR president. “We thought that might start to fall off as we get group and business back, but that hasn’t happened yet and is certainly helping drive increased outlook for the rest of the year.”
STR is CoStar’s hotel data analytics firm, and Hite spoke with Hotel News Now at the recent NYU International Hospitality Industry Investment Conference.
Hite added some details to support the company’s move to increase its average daily rate forecast in 2022, revising it upwards $11 to $145 for the year.
She called the new number “easily achievable and pretty conservative based on what’s happened the first five months of the year,” as hoteliers have consistently been able to grow rate as travelers scramble to make up for lost time when travel was difficult if not impossible.
“Forty-one percent of our hotels in the country are running rate growth above inflation,” Hite said, though about 17% still are experiencing rate declines compared to 2019, which creates a drag.
While total hotel revenue and profits have exceeded 2019 levels in April and May, according to Hite, it’s important to remember that costs and inflation are increasing while staffing levels are not back to 2019 benchmarks.
“We’re going to see more expense pressure in the coming months of 2022,” she said. “It’s good news on the profitability side, but don’t be surprised if we see some ups and downs.”
For more from Hite on STR’s revised forecast, how business transient and group travel are affecting key performance indicators and more, watch the video above.