In 2023, the global lodging industry demonstrated resilience as RevPAR achieved a full recovery and by November, RevPAR had reached impressive levels ranging from 94% to 121% of 2019 levels across regions, with the Middle East, Europe, and the Americas leading the way.
While Asia Pacific (APAC) is still working towards full recovery, positive performance trends indicate that RevPAR is expected to surpass 2019 levels by the first quarter of 2024.
Notably, resort and leisure-heavy markets rebounded swiftly, while urban markets experienced an acceleration in performance as business, group, and international travel gradually bounced back. In the year ahead, urban hotels, particularly in London, New York, and Tokyo, are anticipated to generate substantial investor interest.
Although global RevPAR has already exceeded 2019 levels by 12%, there are further growth opportunities in 2024. Outbound Chinese travel, facing obstacles such as visa delays and airlift issues, has only reached 50% of 2019 levels. However, Chinese travel is expected to gain momentum in 2024, benefiting broader Asia and U.S. gateway cities.
Full recovery for Chinese travel may extend into 2025 due to ongoing domestic volatility. Europe will remain a favored destination for both domestic and international travelers throughout 2024, with upcoming events like the Summer Olympics in Paris and Taylor Swift's Eras Tour in the UK and Western Europe driving visitor interest. Markets to closely monitor include India, Turkey, Saudi Arabia, and Spain.
While business travel spend is projected to fully recover in 2024 according to the Global Business Travel Association (GBTA), leisure tourism is likely to continue being the primary driver of global hotel performance.
In the year ahead, travelers will prioritize experiences that align with their personal values. Hotels that effectively articulate their commitment to sustainability, wellness, and authenticity will gain a competitive edge, enabling them to expand market share and enhance asset values while accessing new sources of capital.
As traveler expectations increase, a hotel's brand becomes increasingly significant. With a wide range of 1,350 global hotel brands available, effective communication and execution of brand promises are essential.
Hotel owners can be expected to refine their brand promises in 2024, potentially leading to brand consolidation, especially as traditional hotel brands explore new verticals beyond providing accommodations.
Read the full report now for a recap on 2023 transaction activity; 2024 debt market outlooks; and these three themes to watch for in the year to come.
- Resurgence of urban market performance and renewed investor interest
- Evolution and power of hotel brands for consumers and investor
- Rise in sustainable hotel investment and regenerative tourism
Contributors:
Zach Demuth
Jessica Jahns
Marina Bracciani
Ophelia Makis
