STR and Tourism Economics announced changes to the 2023 United States hotel forecast during the Americas Lodging Investment Summit (ALIS).
The occupancy projection for the current year was lower than the previous forecast by 0.1 percent, while projections for average daily rate (ADR) and revenue per available room (RevPAR) were lifted by 0.5 percent and 0.3 percent, respectively.
The forecast also found that U.S. hotel occupancy rates for 2023 will reach 63.6 percent, while ADR will increase by 2.1 percent and RevPAR by 3.7 percent.
“Even if the anticipated recession is more on the shallow side, performance growth in 2023 will be pretty remarkable,” STR president Amanda Hite said. “Gains are slowing, however, with inflation rising at a faster rate than ADR. Demand continues to trend at record levels with continued strength in the leisure segment as well as a substantial return in group business.”
While STR and Tourism Economics made a modest upgrade to the 2023 forecast, the groups also revealed subsequent downward adjustments for 2024. Next year’s forecast includes a 0.3 percent downgrade in occupancy and a 0.1 percent lift in ADR, which meant a RevPAR downgrade of 0.4 percent.
Despite the negative update, U.S. occupancy is expected to reach 65.3 percent next year, while ADR is expected to climb by 3.8 percent and RevPAR by 6.6 percent.
“While improving, a deficit persists in business travel – a segment that is especially important for the upper-tier classes,” Hite continued. “Overall, much of the industry is in a solid position to navigate choppy waters ahead, and we will even see a return to the year-over-year benchmark as the pandemic calendar comparables are behind us.”
Data found that RevPAR was fully recovered in 2022 on a nominal basis, but will not achieve that status when adjusted for inflation until 2025.
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