PwC: Business travel and groups expected to offset softening leisure demand
Increasing economic headwinds to impact hotel performance for balance of this year and into 2024
Despite worries of recession, bank failures, and a liquidity crisis affecting the macroeconomy, US hotels continue to outperform expectations, according to PwC's US Hospitality Directions May 2023.
Leisure travel continues to be strong, even though growth levels are slowing, and individual business travel and group business has slowly re-emerged, contributing more significantly to future growth expectations.
Key takeaways
- While occupancy in Q1 2023 was still down 2.1 points from the same period in 2019, ADR increased 17.0 percent;
- With slowing growth in occupancies for the balance of this year, PwC now expects average daily room rates to increase 4.1% for the year, with resultant RevPAR up 5.5% – approximately 114% of pre-pandemic levels, on a nominal dollar basis;
- For the remainder of 2023 and into 2024, demand growth from individual business travel and groups is expected to offset a softening in leisure demand, with outbound international leisure travel outpacing inbound, given the relative strength of the dollar.
Get the full report at PwC