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THE STATE OF the U.S. hotel industry is strong going into 2024, according to American Hotel & Lodging Association's 2024 State of the Hotel Industry report. Average hotel occupancy is expected to reach nearly 63.6 percent in 2024, a slight increase from the 62.9 percent in 2023 but below the 65.8 percent rate recorded in 2019. Nominal RevPAR is also anticipated to rise to $101.82 in 2024, up by 4 percent from 2023 and over 17 percent from 2019. AHLA projects hotels will pay employees a record sum of over $123 billion in wages, salaries, and compensation in 2024, surpassing $118 billion in 2023 and $102 billion in 2019. Hotels are expected to add approximately 45,000 employees this year, while the industry's workforce remains nearly 225,000 below the almost 2.37 million employed in 2019, the AHLA report said. The report, projecting persistent challenges for hoteliers in the face of nationwide labor shortages as they approach 2019 occupancy levels, draws on data and analysis from Oxford Economics. It was developed in collaboration with AHLA Premier Partners: STR, Avendra, Ecolab, Encore, JLL, Oracle, and Towne Park.

U.S. HOTEL REVPAR is expected to grow steadily in 2024, driven by improving group business, inbound international travel, and traditional transient business demand, according to CBRE. This follows a strong performance in 2023 that muted the new forecast in some areas. The research firm forecasted a 3 percent increase in RevPAR growth in 2024, with occupancy improving by 45 basis points and ADR increasing by 2.3 percent. It indicates ongoing recovery of the lodging industry, with RevPAR in 2024 expected to surpass 2019 levels by 13.2 percent, CBRE Hotels said in a statement. CBRE's baseline forecast expects 1.6 percent GDP growth and 2.5 percent average inflation in 2024. Given the strong correlation between GDP and RevPAR growth, the economy's strength will directly impact the lodging industry's performance, the statement said. "We expect RevPAR growth to be slower in the first quarter due to last year's strong performance, but to reach its peak in the third quarter driven by the influx of inbound international travelers during the busy summer season," said Rachael Rothman, CBRE's head of hotel research and data analytics. "Urban and airport locations should particularly benefit from group and inbound international travel, as well as the normalization of leisure travel."

TOURISTS ARE PROJECTED to maintain or increase their travel spending in 2024 compared to the previous year, according to American Express Travel's "2024 Global Travel Trends Report". Approximately 84 percent of respondents from countries including the U.S., Australia, Canada, India, Japan, Mexico, and the U.K. anticipate spending the same or more, with 77 percent prioritizing the quality of their travel experience over cost considerations. "Travelers are focused on creating the right itineraries and building memories, whether that means booking a trip to see a favorite sports team compete or taking a once-in-a-lifetime expedition cruise," said Audrey Hendley, American Express Travel's president. "Our 'Global Travel Trends Report' sheds light on what is driving global travel bookings and provides inspiration for where to go next." About 65 percent of respondents express greater interest in embarking on a major trip in 2024 compared to previous years, the report said. Additionally, 72 percent prefer saving money for a major trip over spending it on social outings with friends. More than half of respondents intend to save for a major trip over a span of six months to two years.

A STABLE ECONOMIC backdrop is expected to fuel a 10.7 percent year-over-year increase in the U.S. short-term rental industry in 2024, surpassing the 6.7 percent rise seen in 2023, according to AirDNA's 2024 outlook report. Moreover, AirDNA foresees balanced growth for the industry in 2024, marked by a projected 10.9 percent increase in supply expansion guided by rising demand for more sustainable market practices. "Approaching 2024, the industry anticipates balanced growth with a projected 10.9 percent increase in supply expansion," said Jamie Lane, senior vice president of Analytics at AirDNA. "Contrary to exaggerated reports of an STR 'collapse,' heightened market competition emphasizes the need for hosts and property managers to meticulously monitor data trends. This strategic approach is crucial for surpassing competitors and sustaining revenue, taking advantage of a strong economy and the growing preference of travelers for STR lodging."

SOUTH INDIAN CITY Hyderabad topped the list of most-booked cities in India for 2024, according to a recent study by OYO. Religious tourism remains strong, with Puri, Varanasi, and Haridwar as key spiritual destinations, drawing large numbers of pilgrims. OYO's annual "Travelopedia 2024" report analyzes travel trends using its booking data. "2024 has marked a year of transformation in global travel," said Shreerang Godbole, OYO's global chief service officer. "Travellers are embracing flexibility, whether for business or leisure. Remote work trends are driving demand for both quick getaways and long stays." Hyderabad led bookings, with growth in both leisure and business travel, followed by Bengaluru, Delhi, and Kolkata, the study found. Uttar Pradesh remains India's top travel state, with Maharashtra, Telangana, and Karnataka also showing strong booking volumes. Smaller towns like Patna, Rajahmundry, and Hubli saw up to 48 percent year-on-year booking growth, indicating rising interest in non-metro destinations.

CHOICE HOTELS INTERNATIONAL reported a 16 percent year-over-year increase in net income to $299.7 million in 2024 and a 12 percent rise in adjusted EBITDA to a record $604.1 million, exceeding its full-year guidance. The company's global system size grew 3.3 percent to 653,810 rooms, including 4.3 percent growth in its domestic upscale, extended-stay and midscale portfolio. It opened 407 hotels globally in 2024, a 21 percent increase, including its 515th extended-stay hotel in the fourth quarter, Choice said in a statement. "Choice Hotels generated another year of strong results in 2024, exceeding the top end of our earnings guidance and delivering a 4.3 percent year-over-year net increase in our more revenue-intense domestic rooms portfolio, a testament to the success of our growth strategy," said Patrick Pacious, Choice president and CEO. "In 2024, we also successfully relaunched four brands, expanded our partnerships business, increased our international footprint, achieved record organic rewards program growth, and unlocked new value through additional ancillary revenue opportunities."

CORPORATE TRAVEL SPEND by U.S. companies is expected to grow 8 to 12 percent, reaching or exceeding pre-pandemic levels by the end of 2024, according to a recent Deloitte study. Around 73 percent of travel managers expect their companies' travel spend to increase in 2024, while 58 percent expect further increases in 2025, with projected gains averaging 14-15 percent each year. Deloitte's 2024 corporate travel report, "Upward Climb with Uphill Struggles," found that live events are a top growth driver, with 6 in 10 business travelers expecting to attend a conference, trade show or exhibition this year. "Business travel has been slower to come back following pandemic slowdowns, but this could be the year that it accelerates to new heights," said Eileen Crowley, Deloitte's vice chair and U.S. transportation, hospitality and services attest leader. "More employees are traveling for business-and enjoying it-underscoring that in-person connection often remains a critical component. As companies see a renewed benefit in the opportunities business travel provides, business leaders can capitalize on the enthusiasm and prioritize travel experiences that are valuable to both the organization and employee."

CBRE HOTELS RECENTLY reduced U.S. hotel forecast as lodging demand dips amid soft leisure travel and slower corporate profit growth. The upcoming election in November and other economic factors led to the revisions. The research group now projects a 1.2 percent RevPAR increase for 2024, down from 2 percent in May. However, it expects a 2 percent RevPAR growth in the second half of 2024, up from 0.5 percent in the first half, driven by international tourism and election events. Lodging industry performance is closely linked to economic strength, with GDP growth generally correlating with RevPAR growth, CBRE said in a statement. The company forecasts 2.3 percent GDP growth and 3.2 percent average inflation for 2024. "We expect low single-digit RevPAR growth over the near-term as election-related events, growth in inbound international travel and an anticipated lower interest rate environment should support hotel demand," said Rachael Rothman, CBRE's head of hotel research and data analytics. "Challenges including weakening consumer spending and increased competition from short-term rentals, cruise lines and other lodging alternatives pose downside risks."

STR AND TOURISM Economics downgraded their growth rate forecast for the U.S. hotel business with their final revision of 2024. The forecast for next year remains uncertain as the impact of the presidential election becomes clear. For 2024, projected gains in ADR and RevPAR were each downgraded, down 0.5 percentage points to 1.5 percent growth for ADR and with RevPAR's projected growth dropping 0.6 ppts to 1.4 percent, respectively. Occupancy for the year was lowered 0.1 ppts to 62.9 percent, after the previous forecast projected the metric to remain steady from 2023. For 2025, the occupancy growth projection was downgraded 0.4 ppts, and the forecast for ADR and RevPAR increases were lowered to 1.6 percent and 1.8 percent, respectively. "The outlook for 2025 remains somewhat in flux, with positive sentiment potentially offset by the higher cost of living," said Amanda Hite, STR president. "Based on current economic conditions, higher-end hotels will continue to drive industry performance. The change in the presidential administration is anticipated to yield stronger economic conditions at first, which is not yet reflected in the data."

IHG HOTELS & RESORTS reported global RevPAR growth of 3 percent for 2024 and 4.6 percent in the fourth quarter, with the Americas rising 2.5 percent and 4.6 percent for the year and quarter, respectively. The company acquired Germany-based lifestyle hotel brand Ruby for about $116 million, aiming for global expansion, including the Americas. It opened 371 hotels globally in 2024, up 24 percent, and added 714 to the pipeline, a 34 percent increase, including 16,832 rooms opened and 26,552 signed in the Americas, IHG said in a statement. "Thanks to the hard work and dedication of our teams around the world, 2024 was an excellent year of financial performance, strong growth and important progress against a clear strategy that is unlocking the full potential of our business for all stakeholders," said Elie Maalouf, IHG's CEO. "RevPAR growth accelerated in the fourth quarter, reflecting the breadth of our global footprint and improvements in all three regions. Together with strong system growth, notable margin expansion and the benefit of returning surplus capital through buybacks, we're pleased to report adjusted EPS growth for the year of 15 percent."

THE U.S. GENERAL Services Administration announced Wednesday a raise in its standard permissible per diem rates for federal travelers, reaching $166 for fiscal year 2024. This adjustment stems from a year-on-year increment of $9 in the lodging allowance, now set at $107. The rate will be applicable from Oct. 1 to Sept. 30, 2024, GSA said. The per diem guidelines regulate the reimbursement of federal employees' lodging and meal expenses for official government travel. These guidelines involve a $9 increase to the continental U.S. lodging rate, as well as significant rate hikes in multiple non-standard areas. "GSA bases the maximum lodging allowances on historical ADR data, less 5 percent. However, the COVID-19 pandemic led to unprecedented declines in ADR, followed by a volatile hotel industry recovery," GSA said in a statement. "The ADR data available to establish fiscal year 2024 rates was from before the COVID-19 Public Health Emergency expired on May 11. Similar to the approach for fiscal year 2023, GSA made upward adjustments to ensure that maximum lodging allowances for federal travelers are sufficient in fiscal year 2024."

CONSUMERS ARE EXPECTED to reprioritize travel in 2024, albeit with demand fluctuations for various products and amenities in 2024, according to Deloitte's 2024 Travel Outlook. The report says hospitality providers need to enhance the experiences they offer or risk losing travelers' attention and Those adept at applying technology to create personalized and flexible services will do better than others this year. The pent-up demand seen following the pandemic that led to travel surges in the prior two years is dwindling, the report said. It's being replaced, however, by a steady increase in traveling for experiences, aided in some cases by the increased prevalence of remote working, meaning travel remains a priority for many consumers. An economic downturn could dampen that enthusiasm, according to the Travel Outlook. However, technology can help provide the flexibility to offer affordable, personalized packages that may compensate for consumers' responding parsimony.

THE U.S. CONSTRUCTION pipeline reached a record level in the first quarter of 2024, according to Lodging Econometrics. The pipeline included 6,065 hotels with 702,990 rooms, showing a 9 percent year-over-year rise in hotels and a 7 percent increase in rooms compared to the previous year. Furthermore, each stage of the pipeline saw year-over-year growth in the first quarter. LE's Q1 2024 U.S. Hotel Construction Pipeline Trend Report showed 1,144 hotels under construction, totaling 141,336 rooms-a 9 percent rise in hotels and a 1 percent increase in rooms compared to the previous year. Hotels set to begin construction in the next 12 months total 2,259, comprising 260,968 rooms, reflecting a 10 percent increase in hotels and an 8 percent rise in rooms year over year, the report said. Both hotel and room counts in the early planning stage increased by 9 percent year over year, reaching record-high figures of 2,662 hotels and 300,686 rooms, respectively.

CALIFORNIA'S HOTEL DEVELOPMENT hit a decade-low in 2024, with just 35 new hotels and 3,798 rooms added, according to Atlas Hospitality Group. This marks a 34 percent drop in hotel openings and a nearly 40 percent decline in new rooms compared to 2023. Atlas Hospitality Group's 2024 Year-End California Hotel Development Survey attributed the decline to rising costs, high interest rates and reduced lending for new projects. "We predict the hotel construction outlook will remain weak in the near term, as investors focus on acquiring existing hotels at discounts to replacement costs," said Alan Reay, Atlas Hospitality's president.

MARRIOTT INTERNATIONAL REPORTED five percent global RevPAR growth in the fourth quarter of 2024, with a four percent increase in the U.S. and Canada and 7.2 percent in international markets. However, net income fell to $455 million from $848 million in the prior year. The company added more than 123,000 rooms in 2024, achieving 6.8 percent net rooms growth from year-end 2023, Marriott said in a statement. "Marriott achieved excellent results in 2024, as we delivered best-in-class experiences that helped drive strong demand for our industry-leading portfolio of brands," said Anthony Capuano, Marriott's president and CEO. "Full-year global RevPAR rose 4.3 percent, and with record gross room additions, net rooms grew 6.8 percent to more than 1.7 million worldwide."

U.S. EXTENDED-STAY HOTELS saw strong performance in the fourth quarter of 2024, with RevPAR and room revenue reaching six-quarter highs, according to The Highland Group. Supply growth exceeded 3 percent for the fourth consecutive quarter, the first time in nearly three years, while demand rose 4.6 percent, the highest since the first quarter of 2021. The Highland Group's 2024 fourth quarter U.S. Extended-Stay Hotels Report found occupancy at a three-year high. "Extended-stay demand growth in the fourth quarter of 2024 was the largest quarterly increase in three years and well ahead of the accelerating gain in supply," said Mark Skinner, partner at The Highland Group.

ECONOMIC HEADWINDS AND geopolitical concerns are expected to affect U.S. hotel performance in 2024, according to PwC. The issues include continuing high interest rates and the Israel-Palestine conflict. Occupancy levels have consistently decreased over the past seven months compared to the same period in 2022. This downward trend is anticipated to persist for the remainder of this year and extend into at least the first quarter of 2024. However, PwC forecasts a 63 percent annual occupancy rate for US hotels this year. Hotels in the U.S. experienced a weakening in leisure demand during the latter part of this year, as global vacation destinations reopened, and leisure travelers regained confidence in traveling abroad, PwC said in its latest report titled U.S. Hospitality Directions: November 2023. Moreover, gains in individual and group business travel haven't completely counteracted this softening.

GLOBAL BUSINESS TRAVEL spending is forecast to reach $1.48 trillion by the end of 2024, surpassing the previous record of $1.43 trillion in 2019, according to a recent study by the Global Business Travel Association. Spending is projected to exceed $2 trillion by 2028, indicating strong growth for the business travel sector. The 2024 GBTA Business Travel Index Outlook, supported by Visa, found that economic stability and lingering pent-up demand are driving growth, reassuring CEOs and CFOs to send their teams back on the road for business meetings. "We are witnessing the expected rebound in the sector, reflecting the resilience and adaptability of businesses and the value of business travel worldwide," said Suzanne Neufang, GBTA's CEO. "With projected spending expected to continue to increase through 2028, the future of business travel looks promising. However, we must remain vigilant and adaptive to potential headwinds in this period of stabilization, as factors such as changing economic conditions, technological advancements and sustainability developments will also shape the sector ahead."

A TOTAL OF 347 mergers and acquisitions, private equity and venture financing deals were reported in the global travel and tourism sector during the first half of 2024, according to GlobalData, a data and analytics company. That is a 12.6 percent year-over-year decline from the 397 deals in the same period of the previous year. North America saw a 31.7 percent year-over-year decrease in deal volume, while the U.S. experienced a 31.5 percent decline in the first half of 2024 compared to the same period the previous year, GlobalData said in a statement. "Even though there was a decline globally due to a dent in deal-making sentiments, the trend was a mixed bag across different markets and regions, with some countries contributing to the decline while some experienced improved activity," said Aurojyoti Bose, GlobalData's lead analyst. "And the same was the case for the deal types under coverage."

EXTENDED-STAY ROOM revenue rose 3.4 percent in the first half of 2024 and 5.1 percent in the second quarter, while occupancy decreased 0.2 percent in the first half but increased 1 percent during the second quarter, according to The Highland Group. The second quarter also saw the highest quarterly RevPAR increase in a year, an 11-point occupancy premium over all hotels and the most rooms under construction in four years. The 2024 mid-year U.S. extended-stay Lodging Market report found that all three extended-stay hotel segments reported record-high room revenues in the first half and for the second quarter. Revenue growth in extended-stay hotels is accelerating in 2024, with the second quarter's increase more than three times that of the first quarter, the report said. The 5.1 percent revenue increase in the second quarter significantly outpaces the 3 percent gain reported for the overall hotel industry by STR/CoStar. "Despite headline grabbing large increases in extended-stay rooms under construction, the annualized increase in room nights available over the next year should be well below the long-term average and the near-term risk of over supply nationally is very low," said Mark Skinner, The Highland Group's partner.