STR and
Tourism Economics have downgraded their U.S. hotel forecast for both full-year
2024 and 205, the companies announced Tuesday, citing persistent inflation
along with the uncertainty of the incoming Trump administration. Underlying
drivers of increased business travel appear steady, however, they noted.
The companies’
forecast revision follows a substantial reduction of projected
performance in June
and a smaller adjustment to the forecast in August. STR and
Tourism Economics now project 2024 U.S. occupancy of 62.9 percent, down from
the 63 percent forecast in August.
The companies
now project 2024 U.S. average daily rate to increase 1.5 percent year over
year, compared with its prior forecast of 2 percent. They now forecast 2024
revenue per available room to increase 1.4 percent year over year, also down
from 2 percent in the August forecast.
For
2025, STR and Tourism Economics project U.S. occupancy of 63 percent, ADR to
increase 1.6 percent year over year and RevPAR to increase 1.8 percent. In
their August projection, they forecast occupancy of 63.4 percent with ADR
increasing 2 percent year over year and RevPAR increasing 2.6 percent.
“The
outlook for 2025 remains somewhat in flux, with positive sentiment potentially
offset by the higher cost of living,” STR president Amanda Hite said in a
statement. “Based on current economic conditions, higher-end hotels will
continue to drive industry performance. The change in the presidential
administration is anticipated to yield stronger economic conditions at first,
which is not yet reflected in the data.”
Tourism
Economics industry studies director Aran Ryan in a statement suggested the incoming Trump administration could “pursue looser fiscal
policy and provide a temporary boost to the economy, before offsetting effects
such as tariffs and immigration act to moderately slow growth.” Still, he
noted that “consumer spending and business investment are expected to
expand, helping support additional gains in business and group travel demand.”
