The end of ‘revenge travel’ has arrived for hotels

The reaction of hotel performance metrics to lower leisure demand will be an intriguing summer story, according to Moody's

Hotel occupancy rates rebounded and average daily room rates soared as households looked to spread their wings and spend their excess savings. But as we know too well, nothing lasts forever. Stimulus funds have dried up, home price appreciation is stagnant or declining, and equities are currently on their own bumpy ride. And while a national recession is far from guaranteed at this point, an economic softening is upon us.

Key takeaways

• Retail sales growth has weakened over the past year. And while service-sector performance is still outpacing that of goods, consumers have been tightening their purse strings across the board, as fear and uncertainty tend to lead to more conservative spending habits;
• While not part of the “revenge” definition, business travel is seeing a resurgence but has yet to return to pre-pandemic levels;
• Will corporate and event travel fully return? It may not happen in the exact same fashion, but a full recovery is possible in the next few years with a realization that education, networking and sales are more effective in person.

Get the full story at Moody's