Six factors hoteliers should watch in 2024

Although many economists have predicted that the U.S. will avoid a recession in the next 12 months, real gross domestic product is predicted to increase by just 1.5 percent in 2024

Although the broader U.S. economy defied expectations in the third quarter of 2023 with positive economic indicators, the outlook for the hospitality industry was not as positive. The surge in leisure travel that has driven positive hotel revenues has begun to subside; and the contemporaneous increase in business travel is unlikely to be sufficient to offset increased operating and capital costs, driven by a combination of labor shortages, turmoil in the debt and real estate markets, supply chain constraints and general inflationary pressures.

Key takeaways

• The slackening of ADR growth will likely continue into 2024, which will likely also further depress RevPAR growth in that period;
• As with other sectors of the commercial real estate market, the hospitality industry has been impacted by turmoil in the debt markets over the past year and a half;
• The increase in interest rates over the past year and a half has also altered the investing landscape for equity investors in hospitality assets.

Get the full story at Hotel Management