Hospitality industry should fare better than US Economy in 2024
The hotel industry has enjoyed demand recovery even as rate growth slows to reach a more normalized pace
The U.S. hotel industry finished 2023 with record highs in average daily rate and revenue per available room, said Amanda Hite, president of STR, CoStar’s hospitality analytics firm. The overall economy held up better than anticipated, but there will be some economic slowdown in the U.S. this year.
Key takeaways
- Even so, there are several reasons to believe the travel economy will fare much better than the general economy. One is the growing employment level of college-educated professionals. Another is that the number of households earning $100,000 or more, a group of people who prioritize travel spend, is expected to grow 3% in 2024 and 2025;
- Corporate profits are a good indicator of spending on business travel. Oxford Economics projects corporate profits will grow 10% this year and next;
- CoStar’s latest U.S. hotel industry forecast keeps RevPAR growth at 4.1%. The projection for room demand in 2024 increased slightly. The growth rate on room supply for next year should be 0.9%, and it won’t be back to the industry’s long-term growth average until after 2026.
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