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April 12, 2024

Hospitality Market Outlook: A Playground for Middle America

In the STR article regarding the 2024 hotel projections, industry experts are optimistic about the future of the hospitality sector. Projections for 2024 and beyond indicate positive trends, with an anticipated ADR change of 3.1%, occupancy change of .6%, and revenue per available room (RevPAR) change of 4.1%.

Traditionally, during economic downturns, the industry has experienced an influx of new hotel supply. However, a unique aspect of the current situation is the limited supply of new hotels, attributed to the prevailing interest rate environment. This scarcity of new developments has prompted hospitality researchers to ponder whether it could contribute to the industry’s improved performance in the coming years.

The STR article states that while the industry’s KPIs have not reached pre-pandemic levels, they still see continued growth in RevPAR carried by strong traveler fundamentals. These fundamentals include low levels of unemployment among college educated individuals, an increase in households above $100k in income, a rise in disposable income, and a stable corporate environment.

The industry’s resilience and solid traveler fundamentals positions hotels for potential growth in the coming years. The diverse sources of demand, including leisure and business travel, contribute to a balanced outlook for the hospitality sector in 2024.

“We expect to see continued growth as fundamentals remain more favourable for the travel economy. The indicator that is especially important is the low unemployment rate among college-educated individuals, those most likely to travel for business and leisure.” 

– Amanda Hite,
STR President

Source:
CoStar

Wroten, Bryan. “US Hotel Performance Expected to Improve despite Economic Slowdown.” CoStar, 13 Dec. 2023, www.costar.com/article/16165111/us-hotel-performance-expected-to-improve-despite-economic-slowdown.
Yun, Lawrence, et al. “COMMERCIAL REAL ESTATE REPORT December 2023.” National Association of Realtors, 3 Jan. 2024, Accessed 19 Jan. 2024.
“Str, Te Upgrade U.S. ADR and Revpar Forecast.” STR, 20 Nov. 2023, str.com/press-release/str-te-upgradeus-adr-and-revpar-forecast.