Our hotelAVE Hospitality Dashboard 4Q24 is now available!
- 4Q24 Total RevPAR finished up 3% versus 4Q23, however GOP margins were down 2% or 200 bps. The major forecasters are aligned on 2025 RevPAR growth, but the industry could outperform with strong group booking pace and growing inbound international travel.
- Lending terms have improved as more entrants drive down spreads; interest rate cuts have driven benchmark rates down 100bps from one year ago. Forward interest rate curves suggest we are at the end of the interest rate cutting cycle. Brokers report robust demand for refinancing with pricing gaps still prevalent in transaction markets.
- Nashville, New York, Phoenix, and Dallas have hotels under construction in excess of 5% of inventory. Several markets have a backlog of projects in final planning exceeding of 3% of stock. Lenders are easing back into construction again and alternative lending sources such as EB5 and CPACE fill construction financing gaps.
- The largest transactions in 2024 included destination resorts and city center hotels filling strategic acquisition initiatives for buyers. Limited and select service hotels also were popular among investors in 2024. Investors solving to a cash-on-cash return versus a leveraged IRR remain better positioned to win sale processes in 2025.
- For the US, labor PAR increased 5% in 4Q24 versus STLY; most top markets had labor PAR growth rates >5%. While the industry continues to feel margin pressure from both managerial and hourly wages, a more immediate concern is availability and costs of labor from immigration and deportation policies of current administration.
Download the full summary to stay up-to-date: hotelAVE Hospitality Dashboard 4Q24
