As we delve into the latest developments in the hospitality sector, we're excited to share key insights after participating in the AHLA Georgia Conference 2024. The conference served as a pivotal platform for industry leaders to explore emerging trends and projections shaping the future of hospitality. Here are five crucial takeaways that are reshaping strategies and paving the way forward in an ever-evolving landscape.
1. RevPAR continues to grow, fueled by ADR. The U.S. has seen 34 months running of positive RevPAR growth, and Smith Travel reports industry record growth for both ADR and RevPAR over the past 12-months.
2. Demand continues to soften, for now. While U.S. occupancy levels have been decreasing since April 2023, largely due to the slowing of transient travel, supply increases remain minimal. Smith Travel forecasts a slight increase in occupancy levels in 2024 as group travel makes a strong recovery.
3. Wage increases continue but are moderating. According to ADP, November 2023 marked the slowest pace of wage gains in the U.S. since 2021 at 5.6% YoY growth. This slowing of growth will continue in 2024 with more moderate hiring and wage growth across industries.
4. International inbound travel shows promising recovery in 2024. U.S. Travel Association forecasts international travel to the U.S. to reach 98% of pre-pandemic levels in 2024, up from 84% in 2023, and to achieve a full recovery in 2025.
5. Economic growth to slow in 2024. The Congressional Budget Office projects the U.S. economy to slow to a growth rate of 1.6% in 2024 as inflation declines and the federal funds rate falls. Other potential deterrents of economic growth are rising geopolitical tensions, high interest rates coupled with elevated debt levels and uncertainties stemming from political elections. It is worth mentioning that Oxford Economics updated their GDP forecast to 2.4% in February.
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