No Match Found
Despite worries of recession, bank failures, and a liquidity crisis affecting the macroeconomy, US hotels continue to outperform expectations. In Q1 2023, US hotels exceeded Q1 2019 (pre pandemic) RevPAR levels by 13.0 percent, based on data from STR. Room rates continue to be the primary driver in this performance recovery. While occupancy in Q1 2023 was still down 2.1 points from the same period in 2019, ADR increased 17.0 percent. Leisure travel continues to be strong, even though growth levels are slowing, and individual business travel and group business has slowly re-emerged, contributing more significantly to future growth expectations.
The Fed’s continued increases in its policy rate, the failure of three banks, and a liquidity crisis, has caused greater uncertainty in the public markets, which is expected to have a downstream impact on hotel demand for the remainder of this year and into next. We now expect annual occupancy for US hotels this year to increase slightly less than in our November 2022 outlook, increasing to 63.4 percent. With slowing growth in occupancies for the balance of this year, we now expect average daily room rates to increase 4.1 percent for the year, with resultant RevPAR up 5.5 percent – approximately 114 percent of pre-pandemic levels, on a nominal dollar basis.
“While US hotels have continued to outperform expectations, recent bank failures, a liquidity crisis and rapidly slowing economy are expected to have a downstream impact on hotel performance for the balance of this year and into next.”
Source: PwC, based on data from STR
PwC Hospitality Directions US is a near-term outlook for the US lodging sector, commonly used by industry decision-makers and stakeholders to better understand the impact of policy and other macro-environmental factors on the sector’s operating performance. Our outlook includes metrics for the overall sector as well as for the chain scales, and is used by our clients for