Our hotelAVE Hospitality Dashboard 1Q24 is now available!
- Industry forecasters project 2024 RevPAR growth of 3.0% to 3.6%; the midpoint of public company full year guidance falls inside this range. Public company earnings reports indicated that corporate and group demand will drive RevPAR growth in 2024; leisure demand softened in 1Q24. Expect GOP margins to remain under pressure with operating expenses growing higher than inflation.
- US Y/Y RevPAR growth slowed to 1% in 1Q24; GOP margin decreased 400 bps. As a result, 1Q24 GOP margins shrunk in most markets with labor costs the main culprit. Most markets also struggled with flex/flow.
- US leisure demand showed softness last quarter driven by seasonality, but the slowdown was mitigated by continued growth in international travel. Several companies expect growth in 2024 due to evidence of strong leisure travel demand
- Shadow supply grew in 1Q24 for major markets; however, its RevPAR growth was flat. NYC shadow supply RevPAR growth was an outlier at 8% in 1Q24, a beneficiary of strong pickup in international demand.
- New supply under construction is decelerating; many projects are no longer feasible or are stuck in financing limbo. Office to hotel conversion metrics are still tight, but could be a source of supply if office pricing eases.
- Debt spreads eased last quarter despite no interest rate cuts from the Fed. Our debt broker sources recommend going to market now while allocations are available. CMBS and debt funds are most active sources.
Download the full summary to stay up-to-date: hotelAVE Hospitality Dashboard 1Q24
