LOS ANGELES—STR and Tourism Economics made a modest upgrade to the 2023 U.S. hotel forecast just released at the Americas Lodging Investment Summit (ALIS). Additionally, a subsequent downward adjustment was made for 2024.
The occupancy projection for this year was lower than the previous forecast by 0.1% while projections for average daily rate (ADR) and revenue per available room (RevPAR) were lifted 0.5% and 0.3%, respectively. For 2024, a 0.3% downgrade in occupancy coupled with a 0.1% lift in ADR meant a RevPAR downgrade of 0.4%.
RevPAR, the key top-line performance metric, was fully recovered in 2022 on a nominal basis but will not achieve that status when adjusted for inflation (real) until 2025.
“Even if the anticipated recession is more on the shallow side, performance growth in 2023 will be pretty remarkable,” said Amanda Hite, STR president. “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. While improving, a deficit persists in business travel – a segment that is especially important for the upper-tier classes. 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.”
“Oxford Economics’ baseline outlook anticipates the economy will experience a mild recession this year, characterized by a peak-to-trough decline in GDP of around 1%, and a roughly one percentage point increase in the unemployment rate,” said Aran Ryan, director of industry studies at Tourism Economics. “In this context, we expect lodging demand growth will slow but remain positive on a year-over-year basis as group events and international travelers return, and households continue to prioritize leisure travel.”
About STR
STR provides premium data benchmarking, analytics and marketplace insights for the global hospitality industry. Founded in 1985, STR maintains a presence in 15 countries with a corporate North American headquarters in Hendersonville, Tennessee, an international headquarters in London, and an Asia Pacific headquarters in Singapore. STR was acquired in October 2019 by CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces. For more information, please visit str.com and costargroup.com.
About Tourism Economics
Tourism Economics, an Oxford Economics company, focuses on the intersection of the economy and travel sector, providing actionable insights to our clients. We provide our worldwide client base with direct access to the most comprehensive set of historic and forecast travel data available. And our team of specialist economists develops custom economic impact studies, policy analysis, and forecast models.
The above is a news release written by a third party. While HNN’s editorial mission is to produce unique content, it occasionally publishes timely, newsworthy news releases to complement in-house reporting efforts. All news releases are clearly marked as such. For questions and clarification, please contact Editorial Director Stephanie Ricca at sricca@hotelnewsnow.com.