In a recent call hosted by Truist, hotelAVE an shared optimistic outlook for 2024 for corporate and group travel. Despite ongoing workplace dynamics, corporate and group travel are expected to experience significant RevPAR growth, with a projected increase of 5.8% year-over-year and a 12% improvement relative to the 2019 baseline.
Other key takeaways:
- Challenges persist with corporate negotiated room rates lagging behind operating costs
- Inflationary pressures and labor negotiations add complexity
- Potentially the biggest mover is group business, which is forecasted by hotelAVE to have a robust recovery with 2024 demand equaling 2019. Positive fundamentals for group next year include:
- Association booking on an upswing.
- Long-term outperformance since COVID “because of the fundamental shift in the corporate traveler” and the need to get together for association meetings and corporate events.
- Group ADR +7% YTD and 2024 outlook is for similar YOY growth. “If group RevPAR grows at a healthy/above-inflationary manner, the total revenue spend ramifications (out-of-room spend) are positive,” wrote Truist, pointing particularly to companies such as Hyatt Hotels Corp. and Ryman Hospitality Properties. “Total revenue growth that is strong has implications for C-corp base and incentive management fees and in theory better operating efficiencies,” it added.
- Expectations that the historic relationship between group to transient rate normalizes at 93%.
- Expectations that group will continue to grow a little bit more in 2025 and then settle.
Read the full article on HOTELS Magazine here.
