In terms of a weather forecast, while 2023 was partly cloudy, the expectation for 2024 will be clearing skies.
At least, that's according to STR Vice President of Analytics Isaac Collazo and CoStar National Director of Hospitality Analytics Jan Freitag in a bonus episode of "Tell Me More: A Hospitality Data Podcast" focusing on what's to come for the U.S. hotel industry this year.
Hotel room supply hit a trough in 2023 with a 0.3% increase, but supply is expected to climb in 2024 by 0.8%, Collazo said. The thing to focus on, however, is demand. Demand grew by 0.9% last year, but the projection for 2024 is 1.8% year-over-year growth.
"If our forecast comes to be, we will have sold more rooms in 2024 than ever before in history," he said.
A survey by global outplacement and career transitioning firm Challenger, Gray & Christmas found that in terms of return to office, a three-day in office, two-day home hybrid model is becoming the new normal, Freitag said. That could potentially affect business travel behavior, leading people to subconsciously choose a three-two travel week in which they won't travel for work on Mondays and Fridays.
"What that then could mean is that we see this high compression night, suddenly everybody's on the road Tuesday-Wednesday, plus to that you add to that group demand," he said. "Will we suddenly see pretty healthy [average daily rate] increases midweek, and not so much Monday-Tuesday but just this peak demand night on Wednesday and it's going to be really hard to get a room on that specific night?"
For more of Freitag's and Collazo's thoughts on the U.S. hotel industry in 2024, listen to the podcast above.
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