Global hotel performance remains resilient
The industry's ability to adapt and innovate will be critical as it navigates evolving travel trends and economic conditions in the coming years
Despite ongoing challenges, the global hotel industry showed remarkable resilience in 2024. Demand rose to 4.8 billion room nights - an increase of 102 million from 2023 - driving a 3.7% increase in revenue per available room (RevPAR). While resort and leisure-driven markets began to normalize, urban markets experienced a significant acceleration in demand. Slowing supply growth, coupled with the return of group, corporate and international travel, is expected to drive RevPAR growth of 3% to 5% in 2025.
Key takeaways
Regional performance
- EMEA: Hotel performance surged, outperforming 2019 levels by 25.3% and growing 5.6% through 2023. Major events such as Taylor Swift's Eras Tour and the Paris Olympics contributed to demand;
- Asia Pacific: RevPAR grew modestly (1.6%), still lagging 2019 levels due to visa issues and China's economic slowdown. However, international travel to the region surged, helped by weaker currencies;
- Americas: RevPAR reached an all-time high, but only grew 1.9% year-over-year, impacted by reduced consumer savings and a decline in leisure travel.
Near-term outlook (2025)
- Hotel owners will face profitability pressures due to rising costs and moderating revenue growth;
- Increased investment transactions are expected as loans mature and owners manage capital expenditures;
- Private equity, HNWIs and foreign capital will drive acquisitions, with urban and high-barrier markets in high demand;
- Slowing supply growth may trigger more mergers and acquisitions (M&A), with brands expanding through strategic acquisitions.
Long-term trends
- Traditional hotel brands will diversify into new verticals, including non-traditional lodging and branded residences;
- India's growing population will drive outbound travel, creating new opportunities for hotels and investors;
- As global hotel supply is expected to grow at a slower rate, brands will leverage their financial strategies to maximize market share.
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