
In Q3 2024, hotel industry records hit new highs with ~$56B in room revenue and ~521M available room nights, despite flat demand and a 0.5% drop in occupancy. ADR growth slowed to 1.4%, marking the fourth consecutive decline, with RevPAR up just 0.9%—the second-lowest rate since 2021. While top-tier hotels saw demand rise (luxury up 3.1%) and urban markets outperformed with RevPAR up 2%, economy hotels faced a 2.4% drop in demand and rising operating costs, from labor to insurance. This cost pressure, paired with softening ADR gains, signals a shift back to pre-pandemic norms, with higher-end hotels benefiting from strong corporate and group travel.
The Federal Reserve’s September rate cuts offer some relief, though JPMorgan CEO Jamie Dimon cautions that certain economic fundamentals remain decoupled from Fed actions and election outcomes. This suggests hotel performance will continue to "bifurcate," with upscale properties capturing demand and economy/midscale hotels navigating cost pressures. The outlook points to a steady, modest recovery, with urban and high-demand markets leading growth and economy brands adjusting to new competition and operational challenges.
National
- Hotel property insurance costs per available room vary widely by state but are rapidly increasing across the board
- US hotels post occupancy decline and anemic revenue growth in the third quarter
- Investors and operators remain 'cautiously' optimistic at this year’s Lodging Conference
- Beyond School Colors: How College-Town Hotel Amenities Draw Guests
Local
- Hotel market bifurcation drives two Texas cities differently
- KKR buys nation's biggest provider of near-airport parking in bet on growth in travel
- The Most-Anticipated Hotel Openings for the Remainder of 2023
- Upscale hotel to offer retreat in busy corner of downtown Austin, Texas
- Rollout of Spark brand fuels Hilton's robust hotel pipeline
- Sun Belt dominates ULI’s annual ranking of most promising real estate markets
- The housing market is unlikely to make the Fed’s job easier any time soon
Market Expert
- TX 647016