United States hotels set for bumper 2023-2024 as performance advances
While top-line performance advances, growing operating expenses are projected to limit profit growth over the remainder of the year.
The occupancy projection for this year was lowered 0.2% from the previous forecast, but projections for average daily rate (ADR) and revenue per available room (RevPAR) were lifted 1.5% and 1.3%, respectively. For 2024, a 1.4% downgrade in occupancy coupled with a 0.7% lift in ADR meant a RevPAR downgrade of 0.6%.
RevPAR, the key top-line performance metric, was fully recovered in 2022 on a nominal basis but will not achieve that status when adjusted for inflation (real) until 2025.
Gross operating profit per available room (GOPPAR) was also recovered in 2022 with limited growth forecasted for 2023 and more sizable gains projected in 2024.
The GOPPAR projection for this year was lowered 2.7% from the previous forecast and downgraded 4.0% for 2024.
“Despite the upgrade, economic uncertainty underlines our forecast for the remainder of this year and into 2024,” said STR president, Amanda Hite.
“We have always forecasted with a mild recession in mind, but we’re now looking a later timeline and the added concerns around the banking system.
“Regardless through the first four months of the year, hotel demand improved 4.3% with most of the gain concentrated in the upper upscale and upscale chains.
“These two chains, which are the segments most associated with business travel and groups, are expected to lead industry demand growth for the remainder of 2023.
“With everything considered, the industry has plenty of reasons to remain optimistic about top-line performance.
“At the same time, growing operating expenses, especially labour, continue to pressure the bottom line. Profit margins, while strong, are projected to be lower this year than last,” she said.
Tourism Economics’ director of industry studies, Aran Ryan, added: “Recent stress in the banking system and tighter lending standards will add to inflation pressures and produce a relatively mild recession in the second half of 2023.
“A halting economy will limit gains in lodging demand, though we continue to anticipate returning group and business activity, international travel, and consumers’ desire for travel will sustain modest growth in room nights sold.”
Air New Zealand offers fantastic Kiwi hospitality
Air New Zealand has launched flights to New York City direct from Auckland, the new flagship route for the airline.
The new flights are operated by Air New Zealand’s flagship Boeing 787-9 Dreamliner, which features three cabins, Economy, Premium Economy and up the front, Business Premier, headlined by flatbed seats (featuring mattress toppers and large pillows for overnight flights), fantastic food and wine, thousands of hours’ entertainment and brilliant Kiwi hospitality.
The flights to New York feature a new international menu showcasing the best New Zealand to one of the world’s leading gourmand nations, the United States of America.
Onboard, premium customers can enjoy the likes of seared salmon from Marlborough, free-range chicken from Waikato and crisp salads picked straight from orchards and fields in Gisborne, Waikato and the Manawatū.
On the wine front in Business Premier, expect some of New Zealand’s best drops, including Felton Road’s 2016 Block 3 Pinot Noir from Central Otago, the Stonecraft 2018 Crofters Syrah from Hawke’s Bay and the Kumeu River Mate’s Vineyeard Chardonnay.