STR, TE downgrade U.S. hotel forecast
 STR, TE downgrade U.S. hotel forecast
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 STR, TE downgrade U.S. hotel forecast
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 STR, TE downgrade U.S. hotel forecast
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STR and Tourism Economics made significant downward adjustments to the 2024-25 U.S. hotel forecast just released at the 46th Annual NYU International Hospitality Industry Investment Conference. The latest revision reflects lower-than-expected performance thus far in 2024 as well as lessened growth projections for the remainder of the year.
For 2024, projected gains in average daily rate (ADR) and revenue per available room (RevPAR) were downgraded 1.0 percentage points and 2.1 ppts, respectively. Occupancy for the year is now expected to decline after the previous forecast projected year-over-year growth in the metric. For 2025, an occupancy growth projection was kept in place, but downward adjustments were once again made to ADR (-0.8 ppts) and RevPAR (-0.9 ppts).
“We have seen a bifurcation in hotel performance over the first four months of the year, which we don’t believe will abate soon,” said Amanda Hite, STR president. “The increased cost of living is affecting lower-to-middle income households and their ability to travel, thus lessening demand for hotels in the lower price tier. The Upscale through Luxury tier is seeing healthy demand, but pricing power has waned given changes in mix and travel patterns and to a lesser extent, economic conditions. Travel remains a priority for most Americans, but the volume has lessened as prices on goods and services continue to rise.”
STR, TE downgrade U.S. hotel forecast
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STR, TE downgrade U.S. hotel forecast
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"Still-elevated interest rates and easing wage growth have contributed to cautious business investment and pinched spending by many middle- and lower-income consumers," said Aran Ryan, director of industry studies at Tourism Economics, "Looking beyond this near-term pull-back in demand at lower-tier properties, we expect moderate travel growth to resume, supported by a tempered economic expansion and the continued rebound of group, business, and international travel."
“Higher operating expenses have led us to forecast lower GOP margins,” said Hite. “Labor costs are projected to be nearly 33% of total revenues through the remainer of 2024 and will have the greatest impact on GOP margins. Upper Midscale chains are expected to maintain the lowest labor costs, and thus the most competitive GOP margins for most of 2024, which follows pre-pandemic trends.”
STR, TE downgrade U.S. hotel forecast
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About CoStar Group, Inc.
CoStar Group (NASDAQ: CSGP) is a leading provider of online real estate marketplaces, information, and analytics in the property markets. Founded in 1987, CoStar Group conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of real estate information. CoStar is the global leader in commercial real estate information, analytics, and news, enabling clients to analyze, interpret and gain unmatched insight on property values, market conditions and availabilities. Apartments.com is the leading online marketplace for renters seeking great apartment homes, providing property managers and owners a proven platform for marketing their properties. LoopNet is the most heavily trafficked online commercial real estate marketplace with thirteen million average monthly global unique visitors. STR provides premium data benchmarking, analytics, and marketplace insights for the global hospitality industry. Ten-X offers a leading platform for conducting commercial real estate online auctions and negotiated bids. Homes.com is the fastest growing online residential marketplace that connects agents, buyers, and sellers. OnTheMarket is a leading residential property portal in the United Kingdom. BureauxLocaux is one of the largest specialized property portals for buying and leasing commercial real estate in France. Business Immo is France's leading commercial real estate news service. Thomas Daily is Germany's largest online data pool in the real estate industry. Belbex is the premier source of commercial space available to let and for sale in Spain. CoStar Group's websites attracted over 163 million average monthly unique visitors in the third quarter of 2024. Headquartered in Washington, DC, CoStar Group maintains offices throughout the U.S., Europe, Canada, and Asia. From time to time, we plan to utilize our corporate website, CoStarGroup.com, as a channel of distribution for material company information. For more information, visit CoStarGroup.com.
This news release includes "forward-looking statements" including, without limitation, statements regarding CoStar's expectations or beliefs regarding the future. These statements are based upon current beliefs and are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. The following factors, among others, could cause or contribute to such differences: the risk that future media events will not sustain an increase in future occupancy rates. More information about potential factors that could cause results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, those stated in CoStar's filings from time to time with the Securities and Exchange Commission, including in CoStar's Annual Report on Form 10-K for the year ended December 31, 2023 and Forms 10-Q for the quarterly periods ended March 31, 2024, June 30, 2024, and September 30, 2023, each of which is filed with the SEC, including in the "Risk Factors" section of those filings, as well as CoStar's other filings with the SEC available at the SEC's website (www.sec.gov). All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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