The U.S. hotel market is facing a revised forecast for 2024, with STR and Tourism Economics lowering the projected growth in Revenue Per Available Room (RevPAR) to 1.4% and Average Daily Rate (ADR) growth to 1.5%. The occupancy forecast has also been downgraded to 62.9%. This adjustment reflects ongoing economic uncertainties and the potential impact of the current presidential administration on growth prospects. Amanda Hite, president of STR, emphasized the importance of these economic factors, while Aran Ryan from Tourism Economics pointed to supportive drivers for travel activity, including consumer spending and increased international visitation [a23fd6cb].
Despite these challenges, the second half of 2024 is still expected to see a more robust growth of 2% in RevPAR, 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 continues to grapple with record outbound travel and increased competition from short-term rentals, which may impact overall performance. Resort locations are anticipated to experience flat growth, while the GDP growth for the U.S. is forecasted at 2.6% with inflation at 2.9%. A modest hotel supply growth of under 1% is also expected. Over the next five years, RevPAR is projected to grow at a compound annual growth rate (CAGR) of 2.5% [aeb7df29].
In a broader context, Asia Pacific's tourism recovery is anticipated to continue into 2024, albeit at a slower pace, as reported by Fitch. The firm expects visitation volume in the region to 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].