Hotel occupancy and RevPAR hit a record high in 2023, growing 2.0% in Q1 2024. RevPAR is forecasted to increase by 3.0% for the rest of 2024, driven by inbound travelers, group events, and domestic leisure demand, reaching $101.20, which is 115% of 2019 levels. New York City and San Diego are top performers, with RevPAR exceeding pre-pandemic levels. However, 200 new hotels are expected to open in 2024, a 37% increase from 2023, which may temper performance. Despite strong metrics, U.S. hotel investment dropped from $52 billion in 2022 to $24 billion in 2023 due to rising interest rates.
Investors remain optimistic, especially in luxury and upscale sectors, which are forecasted to see significant RevPAR growth in 2024. Lenders are more active, particularly for stabilized assets. While distressed sales haven’t materialized widely, loan maturities may push some owners to sell, with lenders showing willingness to work with borrowers.