Meeting Mentor Magazine

July 2024

Key Hotel Metrics Blow Past 2019 Levels

Life is good these days in the hospitality world — or at least, it’s a whole lot better than it was a few years ago. Hotel rates in North America are up almost 14% over what they were back in 2019, according to the latest data from hotel market analyst STR. Despite occupancy levels that remain a tad below 2019 levels, those higher rates also mean North American hotels are reaping a higher revenue per available room (RevPAR) — 8% more than they were before the pandemic hit.

Though the numbers vary, the basic story remains the same for other of the world’s regions, with the exception of Asia, which was still feeling the effects of COVID-related travel rules at the time STR collected its latest data.

“The industry’s resilience has been underpinned by significant pent-up leisure travel over the summer, along with the return of corporate demand, as the nature and length of this business travel has evolved,” said STR Managing Director Robin Rossmann. “Unlike previous downturns, room rates have been the key driver of recovery. Though occupancy came in below the pre-pandemic comparables, the metric is anticipated to stabilize throughout 2023. Despite economic headwinds, the industry is operating from a position of strength in the new year.”

But what about the potential the U.S. could slide into a recession in the near future? “Even if the anticipated recession is more on the shallow side, performance growth in 2023 will be pretty remarkable,” STR president Amanda Hite said during the Americas Lodging Investment Summit. “Gains are slowing, however, with inflation rising at a faster rate than ADR. Demand continues to trend at record levels with continued strength in the leisure segment as well as a substantial return in group business.”

And, according to the American Hotel & Lodging Association 2023 State of the Hotel Industry Report, U.S. hotel room revenues are also expected to exceed pre-pandemic levels by 16% — a big jump from the 4% increase hotels experienced in 2022. Occupancy also should catch up to rates and RevPAR this year. The average U.S. hotel occupancy is forecast to reach almost 64%, just a hair shy of the 66% levels the industry enjoyed in 2019 and lightyears ahead of the dismal days of 2020 when occupancy rates dove down to a historic annual low of 44%.

This could exacerbate ongoing challenges facing the U.S. hospitality industry, including staffing issues. While hotels are having some success in staffing up since the nadir of the early COVID days when hospitality lost more than 682,000 direct employees, as of time the AH&LA report was published, U.S. hotels were still down 400,000 direct employees from 2019 levels. However, some hotels are making use of contract labor to help keep service levels up. Some also are amping up their use of robots and automation, especially for routine tasks that don’t require as much of a human service component, such as contactless check-in, mobile app connectivity, augmented reality, and virtual site inspections.

Still, this staffing shortage is affecting the experience for meetings and events. According to a Knowland survey, less than 22% of planners report feeling truly satisfied with hotel and venue responses. This issue, of course, is made more acute by another trend: shorter lead times as hotels juggle the still-booming leisure segment with an influx of new events, along with all those who had to cancel or postpone their meetings over the past few years and now are rebooking.

 

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About ConferenceDirect
ConferenceDirect is a global meetings solutions company offering site selection/contract negotiation, conference management, housing & registration services, mobile app technology and strategic meetings management solutions. It provides expertise to 4,400+ associations, corporations, and sporting authorities through our 400+ global associates. www.conferencedirect.com

About MeetingMentor
MeetingMentor, is a business journal for senior meeting planners that is distributed in print and digital editions to the clients, prospects, and associates of ConferenceDirect, which handles over 13,000 worldwide meetings, conventions, and incentives annually. www.meetingmentormag.com

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