STR forecasts lower growth for U.S. hotels

STR and Tourism Economics lowered their year-over-year growth projections in the revised 2023-24 U.S. hotel forecast

Aug 11, 2023

For 2023, growth in revenue per available room (RevPAR) was lowered by 0.5 percentage points, due to a 0.6ppt downgrade in occupancy growth. While that RevPAR growth remains above the long-term historical average, most of the increase was front-loaded to the early portion of the year. For 2024, the RevPAR growth projection was also lowered 0.5ppts on a 0.5ppt downgrade in occupancy. Average daily rate (ADR) was upgraded 0.1ppts for 2023 but kept flat for 2024.

Key takeaways

  • Last quarter, demand underperformed projections in the luxury segment with travelers pulling back on their leisure spending or opting for overseas trips, as well as the midscale and economy portion of the market due to recessionary effects;
  • There have been conflicting signs of economic slowdown and the impact on consumer sentiment, but hoteliers remain optimistic, especially those in the middle-to-higher end of the market;
  • A lot of the normalization we have seen in the data supports that optimism with a steady uptick in business travel and continued improvement in the major markets;
  • ADR growth rates have moderated as the impacts of inflation and record-breaking leisure travel have waned, but our forecasted growth rates are still skewed toward the upper-end hotels with a rate-focused performance strategy.

Get the full story at STR

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