Mild recession to have limited effect on hotels
Rate expected to be main driver of revenue until occupancy growth returns in 2024
At this year’s Hotel Data Conference, a travel industry economist and hotel industry leaders said that even though they expect recession to arrive later this year, it will be mild and short-lived.
Key takeaways
- A revised 2023 U.S. hotel industry forecast from STR lays out a slight decline in revenue per available room growth but strong rate projections and the expectation that occupancy growth will return next year;
- There’s an economic slowdown expected to hit later this year, said Adam Sacks, president of Tourism Economics, an Oxford Economics company. Consumers are still worried - the biggest problem they face is inflation cutting into their disposable income;
- In response to these factors, lodging demand in the U.S. has started to soften relative to 2019. The second quarter gave up some ground compared to 2019, and some of that is traceable back to income groups.
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