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ADR is projected to rise by 0.1 percentage points in 2024, with occupancy and RevPAR remaining unchanged from the previous forecast, according to STR and Tourism Economics' initial U.S. hotel forecast for 2024 at the Americas Lodging Investment Summit. Yet, 2025 projections for key performance metrics were revised downward due to stabilized long-term average trends: occupancy down 0.1 percentage points, ADR down 0.3 points and RevPAR down 0.5 ppts. "U.S. ADR and RevPAR reached record highs in 2023 with solid travel fundamentals and a big year for group business underpinning performance," said Amanda Hite, STR president. "We expect to see continued growth as fundamentals remain more favorable for the travel economy. The indicator that is especially important is the low unemployment rate among college-educated individuals, those most likely to travel for business and leisure." The STR and Tourism Economics forecast a rise in GOPPAR growth due to increased TRevPAR levels and stable labor costs. Among chain scales, luxury and upper upscale hotels are expected to see substantial cost increases, driven by growing group demand.

STR AND TOURISM ECONOMICS have increased year-over-year growth projections for ADR and RevPAR in the final revision of the U.S. hotel forecast for 2023. While some factors, such as higher interest rates and more restrictive lending, may impact the economy, their effect on the travel industry is not expected to be strong. In 2023, RevPAR saw a 0.3 percentage point increase, propelled by a 0.6ppt rise in ADR growth, according to STR and TE. Meanwhile, recent RevPAR trends affirm rate as the predominant performance driver. Occupancy was downgraded by 0.2ppts, STR and TE said in a statement. Growth projections for key performance metrics in 2024 remained flat from the previous forecast, reflecting the stabilization of long-term average trends.

OCCUPANCY FOR U.S. hotels is now expected to finish the year a little down from the previous forecast by STR and Tourism Economics. However, projections for ADR and RevPAR recovery remain on track in the data firms' final forecast of the year. RevPAR is still expected to fully recover this year on a nominal basis, but not until 2025 when adjusted for inflation, according to the new forecast. The updated forecast lowered occupancy by less than a percentage point for 2022, standing now at 62.7 percent compared to the previously forecasted 63 percent released in August. "As expected, group business travel has been much more aligned with pre-pandemic patterns, specifically in October when group demand hit a pandemic-era high," said Amanda Hite, STR president. "Leisure travel has maintained its strength since our previous forecast update, and we expect these strong demand trends in both group and leisure to continue through the fourth quarter. Bottom-line performance has also persisted, with our most recent data showing strong profit margins due to lower employment levels and reduced services. The challenges around labor continue to be a concern, as high levels of hospitality unemployment and more spending on contract labor are pushing labor costs on a per-available-room basis above 2019 levels. We continue to take inflation and the likely recession into consideration, but the hotel industry has continued to show resilience through these tougher times, thus the steadiness of our updated forecast."

THE REVPAR OF U.S. hotels reached an all-time weekly high on a nominal and a pandemic-era high on an inflation-adjusted basis in the third week of June, according to STR. Boosted by the highest weekly demand of 28 million room nights sold since August 2019, occupancy was the highest of the pandemic-era during the week. Occupancy was 71.8 percent for the week ending June 18, up from 70.6 percent the week before and dropped 4.8 percent from 2019. ADR was $155.02 for the week, slightly down from $155.37 the week before and increased 14.9 percent from three years ago. RevPAR reached $111.29 during the week up from $109.76 the week before and up 9.4 percent from 2019. San Diego saw the only occupancy increase, up 0.5 percent to 86 percent, over 2019 among STR's top 25 markets. According to STR, New York City (86.6 percent), San Diego and Seattle (85 percent) led the major markets in absolute occupancy for the week.

THE REVPAR OF U.S. hotels is expected to surpass 2019 levels this year, according to the upgraded forecast by STR and Tourism Economics. Still, full recovery may be a couple of years away. ADR and RevPAR for U.S. hotels are forecasted at $14 and $6 higher in 2022 respectively, when compared to 2019, the report presented at the 44th annual NYU International Hospitality Industry Investment Conference stated. However, occupancy in this year is projected to come in under the pre-pandemic comparable. Earlier, the forecast projected nominal RevPAR recovery in 2023. According to the forecast, the major factor in the revised timeline was a plus $11 adjustment in 2022 ADR. But, when adjusted for inflation, full recovery of ADR and RevPAR are not projected until 2024. The report added that central business districts and the top 25 markets are not expected to reach full RevPAR recovery until after 2024.

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."

OCCUPANCY PROJECTIONS ARE dropping while ADR projections are rising in a new forecast for U.S. hotels by STR and Tourism Economics. RevPAR is still expected to recover fully on a nominal basis this year, according to the forecast released Thursday at STR's 14th Annual Hotel Data Conference in Nashville. However, RevPAR is still expected to take until 2025 to recover when adjusted for inflation, according to the forecast. For 2022, RevPAR is now expected to average $93 compared to the projection of $92 released in June, when projected nominal RevPAR recovery was set in 2023. The occupancy projection for the year was lowered to 64.6 percent for the year and the ADR projection rose to $148. The updated forecast adds a little more than $2 to the ADR projection for both 2022 and 2023, and occupancy was lowered by less than a percentage point for each year.

THE UPWARD MOVEMENT of ADR for U.S. hotels lifted the forecast for the market by STR and Tourism Economics. The travel research firms released the new forecast during the opening sessions of the Americas Lodging Investment Summit in Los Angeles on Monday. The recovery timeline laid out in the new forecast remains mostly the same as the previous forecast released in November, with ADR will near full recovery this year. RevPAR is anticipated to exceed 2019 levels in 2023, but when adjusted for inflation ADR and RevPAR are not projected to reach full recovery until after 2025. Occupancy is projected to surpass 2019 levels in 2023. "The industry recaptured 83 percent of pre-pandemic RevPAR levels in 2021, and momentum is expected to pick up after a slow start to this year," said Carter Wilson, STR's senior vice president of consulting. "With so much of that RevPAR recovery being led by leisure-driven ADR, however, it is important to keep an eye on the real versus the nominal. Terms of recovery are not playing out evenly across the board, and many hoteliers have had to raise rates to minimize the bottom-line hit from labor and supply shortages. We are anticipating inflation to remain higher throughout the first half of the year with a gradual leveling off during the third and fourth quarters. If that happens, and we avoid major setbacks with the pandemic, this year will certainly be one to watch with demand and occupancy also shaping up to hit significant levels during the second half."