Growth in leisure demand has moderated for US hotels. Domestic travelers have continued to seek out experiences internationally and inbound international traffic has yet to recover to pre-pandemic levels. An increased appeal of short-term rentals by leisure travelers has contributed to moderating leisure demand for hotels. Individual business travel and group demand have continued to improve but have still not been able to offset the softening of leisure demand.
Article - PwC Reports Economic Uncertainty, Upcoming Election and Geopolitical Tensions to Likely Impact U.S. Hotel Performance Through 2025 - Growth in leisure demand has moderated for US hotels. Domestic travelers have continued to seek out experiences internationally and inbound international traffic has yet to recover to pre-pandemic levels. An increased appeal of short-term rentals by leisure travelers has contributed to moderating leisure demand for hotels.
Leisure demand, while still strong, began to soften in the back half of this year for US hotels, as other parts of the world continued to reopen their vacation destinations and leisure travelers began to once again feel safe traveling abroad. Increases in individual business travel and group business have not yet been able to fully offset this softening.
Article - PwC Reports Economic Headwinds and Geopolitical Tensions Will Likely Impact Hotel Performance Through 2024 - Room rate growth had played a significant role in the initial recovery for US hotels but softened significantly in Q2 before falling to below inflationary growth levels in Q3. That said, ADR growth is expected to begin to increase and slightly exceed a declining inflation level beginning in Q4 and into next year.
The US lodging industry continues to regain strength with early signs of an accelerated recovery emerging since our last publication. In our November edition, we assumed the significance and frequency of recent COVID-19 case spikes would increase the length and severity of the pandemic.