The U.S. hotel market is projected to experience a modest growth in Revenue Per Available Room (RevPAR) of 1.2% in 2024, a decrease from the previously expected 2% growth. The second half of 2024 is forecasted to see a more robust growth of 2%, compared to just 0.5% in the first half of the year. Notably, 57 out of 65 U.S. markets have returned to pre-pandemic RevPAR levels, with major East Coast markets even surpassing their 2019 figures. However, the industry faces challenges, including record outbound travel and increased competition from short-term rentals, which may impact overall performance. Resort locations are expected to see flat growth, while the GDP growth for the U.S. is forecasted at 2.6% with inflation at 2.9%. Additionally, a modest hotel supply growth of under 1% is anticipated. Over the next five years, RevPAR is projected to grow at a compound annual growth rate (CAGR) of 2.5%. Meanwhile, Northern Latin America and Europe are showing a strong tourism outlook, and hotel performance in the Middle East has improved. In Asia Pacific, markets, except for the Maldives, have also reported increases in RevPAR [aeb7df29].
In the broader context, Asia Pacific's tourism recovery is expected to continue into 2024, albeit at a slower pace, as reported by Fitch. The firm anticipates that visitation volume in the region will reach 92% of the 2019 level, up from 65% in 2023. International tourism receipts in nominal U.S. dollars are projected to exceed the 2019 level by about 6.0% this year. Fitch's baseline assumption is that a full recovery of international tourism arrivals in APAC will materialize in the first half of 2025. The recovery is supported by economic resilience, additional flight capacity, and pent-up demand from major visitor markets. However, risks such as slow restoration of air traffic and geopolitical tensions remain a concern. The credit buffers of most Fitch-rated APAC sovereigns are expected to be sufficient against the risks of a sharp tourism downturn, but destinations heavily reliant on tourism, like Thailand, face greater vulnerabilities [8e84c028].
S&P Global Ratings has also weighed in on the economic growth in APAC, forecasting that it will be shaped by export recovery and the impact of elevated interest rates and inflation. The export recovery, initially seen in northeast Asian semiconductor shipments, has now expanded to other sectors. Countries like China and several Southeast Asian nations are experiencing rising export volumes, while Japan's GDP growth is expected to slow due to high inflation. Overall, S&P Global forecasts a 5.1% growth in the APAC region (excluding China and Japan) in 2024 [bdbf28c2][7d8aadea].
The World Bank and Moody's Analytics have highlighted ongoing challenges for Asian economies, including debt, trade barriers, and policy uncertainties. Myanmar's economic crisis adds to the region's difficulties. Moody's Analytics has identified the Philippines as a growth underachiever in ASEAN, emphasizing the need for governments to address long-term issues and invest in education and productivity improvements to ensure sustainable growth [bf8aa04c][19e79eb1][fa6790ca][7d8aadea].