This week in Hospitality & Tourism #46 2024

November 15, 2024

#news
#str
#forecast

Major markets will lead growth in 2025

After a growth streak between 2021 and 2023, lodging performance in 2024 has been disappointing. Robert Mandelbaum, from CBRE Hotels, has the following forecast for 2025:

  • RevPAR Growth: Major U.S. markets are forecast to achieve a 3.3% increase in revenue per available room (RevPAR), with the 25 largest markets seeing a slightly higher increase of 3.5%.
  • Supply and Demand: Supply growth in major markets is expected to be 1.4%, while demand for hotel rooms in these cities is projected to increase by 2.3%, resulting in a 0.9% occupancy growth.
  • Pricing Power: Major markets are projected to see a 2.4% increase in average daily rates (ADR), giving hotel operators some pricing power.
  • Upper-Priced Properties: These are expected to achieve the greatest RevPAR gains, with a forecasted 3.6% increase.
  • Development Hotspots: Savannah, GA, is expected to see the greatest increase in lodging inventory (4.1%), followed by New York City (4.0%). Other development hotspots include Fort Worth, Nashville, and Phoenix.
  • Challenges: Some markets like Albany, San Francisco, and Pittsburgh are expected to see a decline in room inventory due to closures.
  • Overall, while the growth rates are below long-run averages, major markets are expected to perform better than rural areas.

STR: U.S. hotel results for week ending 9 November

As projected for election week, the U.S. hotel industry reported negative year-over-year performance comparisons, according to CoStar’s latest data through 9 November.

  • Among the Top 25 Markets, Las Vegas saw the largest increases across each of the three key performance metrics: occupancy (+6.8% to 85.4%), ADR (+28.2% to US$256.38) and RevPAR (+36.9% to US$219.07).
  • The steepest RevPAR declines were seen in San Francisco (-35.2% to US$111.40) and Washington, D.C. (-27.9% to US$95.89).

3 - 9 Nov 2024 (percentage change from comparable weeks in 2023):

  • Occupancy: 62.6 (-3.5%)
  • Average daily rate (ADR): US$156.11 (-0.1%)
  • Revenue per available room (RevPAR): US$97.73 (-3.5%)
STR Occupancy & ADR