Skift Take
There are economic pressures and segment-specific challenges, such as growing supply in the luxury market.
STR and Tourism Economics lowered their forecast for U.S. hotel demand growth this week. The benchmarking firms now project a more modest 2.1% increase in average daily rates this year — down from the previous estimate of 3.1%.
"Everyone in the hotel sector is saying we don't have as much leisure [demand] on weekends," said Amanda Hite, president of CoStar's STR, during an interview at the NYU International Hospitality Industry Investment Conference.
While the industry remains cautiously optimistic about the remainder of the year, the recovery of lower-tier hotels hinges on the return of leisure travel and potential interest rate reductions.
CBRE, a real-estate consulting firm, also downgraded its forecast this week. It now predicts similar growth in the average hotel daily rate of only 2.4% in 2024.