Average hotel occupancy is expected to reach nearly 63.6 percent in 2024, up from 62.9 percent average and moving closer to the 65.8 percent pre-pandemic rate seen in 2019, according to the American Hotel & Lodging Association’s 2024 State of the Hotel Industry report.
For meeting planners, all signs point to another year of a seller’s market and challenging negotiations.
“2023 was a significant comeback year for hoteliers, and our outlook for 2024 shows the industry is poised to build on that success,” said AHLA President and CEO Chip Rogers in a press statement. “The expectation of higher occupancy rates and record amounts of wages and tax revenue point to a strong future. But hoteliers face continued challenges, including a nationwide labor shortage, persistent inflation, high interest rates, and a federal regulatory agenda that’s making it harder for hoteliers to do business.”
Demand for general travel recovered in 2022 and dipped slightly in 2023, according to AHLA, with business travel also making a comeback. “Business travel recovery is also progressing and accounted for 439 million room nights sold in 2023—8.2 percent below the pre-pandemic comparison,” the report noted.
The meetings and convention business showed strong growth, with 47 percent of meeting professionals expected to increase their budgets in 2024. “The top 25 U.S. markets recovered 99.1 percent of group business in the third quarter of 2023 compared to 2019,” the report noted.
Nationwide Hotel Occupancy Improved Year Over Year
Hotel occupancy in 2023 fell short of projections, averaging 62.9 percent nationally, with the slower recovery in business travel dragging on occupancy rates. Nonetheless, nationwide occupancy improved 0.5 percent year over year and came within 4.4 percent of the 2019 pre-pandemic level, according to the report.
Those rooms are generating more income for hotels: RevPAR is expected to reach $101.82 in 2024, up 4 percent from 2023 and more than 17 above 2019. Guests are spending more, too: expenditures on lodging, transportation, food and beverage, retail, and other outlays is expected to reach a record $758.6 billion in 2024, up nearly 5 percent from 2023 and about 24 percent above 2019 levels.
Room rates continue to edge higher, with single-digit inflation expected to continue through at least the first two quarters of 2020, according to AHLA. The average daily room rate at U.S. hotels rose 4.2 percent increase in 2023, to $155.47, and is expected to rise to $160.16 in 2024—a 21.8 percent increase over 2019.
This story first appeared at Prevue’s sister site, recommend.com.
You Might Also Be Interested In…
On Location: The Langham, New York, Fifth Avenue
New Hotels: Meeting the Demand
