The Americas witnessed steady RevPAR amid a decline in travel spending

The Americas witnessed steady RevPAR amid a decline in travel spending

Hotels in the Americas performed above 2019 levels, although RevPAR stabilized amid declining consumer travel spending, according to real estate firm JLL, affecting resort markets heavily dependent on leisure travel. In contrast, demand for urban travel is increasing, driven by group, corporate and international travel.

HOTELS AMERICA performed above 2019 levels even as RevPAR stabilized amid declining consumer travel spending, according to real estate firm JLL. This has affected resort markets heavily dependent on leisure travel. In contrast, demand for urban travel is increasing, driven by group, corporate and international travel.

According to JLL’s February 2024 Global Real Estate Outlook, global hotel RevPAR surpassed 2019 levels by 11.7 percent in the first 11 months of 2023. The global urban market strengthened with increased international travel and the return of business and group search. London, New York and Tokyo are expected to lead global RevPAR performance in 2024 as urban travel recovers.

The stabilization weighed heavily on resort markets, particularly in the Americas and EMEA, while the Asia-Pacific region continued to accelerate as intra-regional travel increased following the re-opening of borders, the report added. Foreign capital, absent since the onset of COVID, is expected to become more active over the next 12 months. Investors from the Middle East and Asia are likely to lead the way, with urban markets in Europe and select US cities the main recipients of capital.

EMEA leads in RevPAR growth

EMEA led all regions in RevPAR growth over 2019, driven by strong international and intraregional travel, JLL said. While demand is beginning to normalize in certain resort markets, urban productivity has increased, particularly in many cities in Western Europe and the Middle East, resulting in historically high RevPAR.

Domestic tourism within the Asia-Pacific region grew in 2023, leading RevPAR to recover to 94 percent from 2019. The lifting of China’s ban on group travel further strengthens this trend, particularly benefiting Australia and Japan.

Positive outlook for 2024

After all post-pandemic restrictions were lifted, international travel increased in 2023, reaching 87 percent of 2019 levels, the report said. The impact on city hotel demand is notable given the historically strong 90 percent correlation between inbound foreign arrivals and city hotel occupancy, particularly evident in gateway markets such as London, New York and Tokyo.

Meanwhile, JLL expects international travel to accelerate further, with Europe likely to benefit the most, particularly with the Summer Olympics in Paris and Taylor Swift’s Eras tour heading to the UK and Western Europe. This increase in travel should also boost global hotel liquidity.

Investor confidence is returning

With 1,350 global hotel brands to choose from, investors need to be increasingly discerning in the brand they acquire, the report said. Investors are now buying into an entire ecosystem as traditional hotel brands expand into adjacent verticals to capture the entire journey and solidify loyalty.

Branded residences, private members’ clubs and even yachts are becoming increasingly integrated into the portfolios of traditional hotel brands, offering new investment opportunities, JLL said. As hotel development worldwide slows due to rising construction costs, the acquisition of brand platforms is expected to increase shareholder value and become an important focus for investors in the long term.

According to the report, luxury and lifestyle brands are expected to attract significant investor interest, exemplified by PIF’s recent $1.2 billion investment in Rocco Forte Hotels.

The Q4 2023 Global Hotel Construction Trends Report by Lodging Econometrics highlighted the dominance of the US and China, accounting for 64 percent of global projects, with the US leading at 39 percent. Among the top five cities with the largest construction pipelines, three are in the US: Dallas, Atlanta and Nashville.

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