In this global update, we take a journey through each of the four world regions – focusing on performance, pipeline, and factors that influenced the data in 2023, while also looking ahead to what’s in store for the rest of 2024.

The Americas
Analysis by Jean-Claude Pedjeu

The Americas reported successful hotel performance in 2023, building on momentum formed during the post-pandemic period in 2022. The first quarter of 2023 started off with strong growth due to an easy comparison created by the Omicron-related travel bans and restrictions that were prevalent during early-2022.

The remaining three quarters produced slower increases which steadily moderated as the year came to an end. Of the major hotel markets in the Americas, only Miami recorded a decline in revenue per available room (RevPAR), while 15 of those markets posted double-digit growth in the metric. RevPAR increases in all four of the region’s subcontinents were led by strong average daily rate (ADR). The highest occupancy growth was seen in the Caribbean and Central America.

As top-line recovery from the pandemic continued in 2023, the Americas’ bottom line showed the same level of momentum. All of the subcontinents, except for Central America, exceeded 2022 levels in gross operating profit per available room (GOPPAR).

Hotel performance across countries in the Americas reflected that of the major markets. The region enjoyed year-over-year growth in each of key performance metrics: occupancy (+1.2%), ADR (+5.1%), and RevPAR (+6.3%). The overall performance hinged on the United States, given its overwhelming share of the region’s inventory. Of the 15 countries considered in the region, 11 posted double-digit RevPAR growth YoY, while only Peru saw a decline in the metric (-2.2%) in this metric because of a 5.5% drop in occupancy.

Looking at subcontinent performances, only North America produced single-digit growth while each of the remaining three showed RevPAR growth in double figures.

The Caribbean’s occupancy rose 4.6 percentage points to 65.6%, yielding RevPAR growth of 7.5%. The subcontinent’s hotels also improved in aggregate ADR, by $34.51 over 2022 (or +11.8%). Growth in these two metrics drove RevPAR from $179.75 in 2022 to $215.97 in 2023, yielding growth of 20.1%. In 2023, the Caribbean saw the greatest gains in both ADR (+31.6%) and RevPAR (+27.4%).

Similar conclusions are valid for Central America and South America. Both saw impressive results in 2023 compared to 2022. Central America gained across the top-line metrics: occupancy (+8.4%), ADR (+8.7%), and RevPAR (+17.9%). In South America, occupancy rose minimally (+2.7%), while ADR (+21.9%) and RevPAR (+25.1%) grew by double digits.

Three resort destinations—the Bahamas, Jamaica, and Puerto Rico—benefitted from leisure travelers, yielding impressive KPIs, with Jamaica’s key performance metrics rising by double figures over 2022: occupancy (+12.2%), ADR (+15.7%) and RevPAR (+20.8%). The Bahamas reported double-digit increases in occupancy (+15.7%) and RevPAR (+20.8%).

Three South American countries (Argentina, Brazil, Chile) experienced significant RevPAR gains, each producing increases above 25% in the metric.

Moving north, inflation continued to be a drag on hotel performance. The United States saw declines in occupancy for the last nine months of 2023, while maintaining RevPAR increases thanks to modest ADR growth during those months. Full-year performance was solid due to the first three months when growth was strong, with RevPAR (+4.9%) being boosted by an ADR rise of 4.3%.

The word “recession” or “soft landing” had dominated the mind of forecasters over the past few years and was expected to take place during the second half 2023. However, it did not happen, and many economists expect a soft landing for the U.S. economy in 2024 that will include slowing GDP growth without a recession. U.S. GDP for 2024 is forecasted to grow 2.0% over 2023.

In STR’s latest hotel performance forecast with Tourism Economics, released at the end of January, occupancy is projected to reach 63.6% in 2024, with ADR and RevPAR anticipated to increase over 2023, +3.1% and +4.1%, respectively.

Moving forward, inbound international travel to countries in the Americas will be key to this year’s hotel performance. Softening of inflation and reduction of interest rates by the Feds should ease the pressure of the hotel industry in the region.

Asia Pacific
Analysis by Kelsey Fenerty

The Asia Pacific hospitality industry progressively normalized in 2023, with year-over-year occupancy and average daily rate (ADR) growth reaching single digits by year-end for many countries. Growth still varies significantly by country and market, but the variance now relates more to individual market drivers than to pandemic recovery.

India reported relatively soft occupancy growth in 2023, although the slowed growth represented a “reset” to normal travel patterns and shifting holidays rather than a true decline in demand, with traditional high seasons (Q1 and Q4) showing stronger growth than summer and monsoon seasons. In addition, India saw very strong growth already in 2022, even when set against historic highs, bringing it ahead of the recovery curve when compared to many other Asian countries.

Read the full report here