Hospitality Investing News - Northwest April 2024

The Latest in the Northwest Hospitality Market

The U.S. hotel industry concluded 2023 with remarkable achievements in average daily rate (ADR) and revenue per available room (RevPAR), as indicated by Amanda Hite, president of STR, CoStar's hospitality analytics firm. Despite an anticipated economic slowdown in 2024, various factors suggest that the travel economy will outperform the general economy. Growing employment among college-educated professionals and an increase in households earning $100,000 or more are expected to drive travel expenditure. Additionally, corporate profits are projected to rise by 10% in 2024 and the following year, indicating potential growth in business travel spending.

CoStar's latest forecast maintains RevPAR growth at 4.1%, with slight increases in projected room demand for 2024. Although room supply growth is expected to remain below the industry's long-term average until after 2026, ADR growth is anticipated to exceed inflation for the foreseeable future. While the forecast for 2025 slightly adjusts ADR growth downwards, overall demand outlook remains stable.

In terms of RevPAR composition, direct channels, particularly brand.com, have been key contributors to growth, while OTA business hasn't seen significant expansion relative to brand.com. Despite concerns about domestic leisure demand and cautious consumer behavior, optimism persists regarding the corporate transient segment and group bookings, supported by a moderate increase in total revenue. However, geopolitical instability and the U.S. election remain wild cards affecting industry dynamics.