In 2023, the global lodging industry showcased resilience, achieving a complete recovery in revenue per available room (RevPAR). A recent report from JLL revealed that by November 2023, RevPAR had soared to impressive levels, ranging from 94% to 121% of 2019 figures across regions. The Middle East, Europe, and the Americas took the lead in this recovery.
While the Asia Pacific region is still on the path to full recovery, positive performance trends suggest that RevPAR is anticipated to surpass 2019 levels by the first quarter of 2024. Notably, markets heavily focused on resorts and leisure bounced back swiftly, and urban markets experienced an acceleration in performance as business, group, and international travel gradually returned. This year, urban hotels, especially in London, New York, and Tokyo, are expected to attract substantial investor interest.
Despite global RevPAR already exceeding 2019 levels by 12%, growth opportunities are foreseen in 2024. Outbound Chinese travel, hindered by challenges like visa delays and airlift issues, has only reached 50% of 2019 levels. However, a surge in Chinese travel is anticipated in 2024, benefiting broader Asia and U.S. gateway cities. Full recovery for Chinese travel may extend into 2025 due to ongoing domestic volatility.
Throughout 2024, Europe is expected to remain a preferred destination for both domestic and international travelers, driven by upcoming events like the Summer Olympics in Paris and Taylor Swift’s Eras Tour in the U.K. and Western Europe visitor interest. Markets of interest to monitor include India, Turkey, Saudi Arabia, and Spain. While business travel spending is projected to fully recover in 2024, according to the Global Business Travel Association, leisure tourism is expected to continue as the primary driver of global hotel performance.
In the coming year, travelers will prioritize experiences aligned with their personal values. Hotels that effectively communicate their commitment to sustainability, wellness, and authenticity will gain a competitive edge, expanding market share and enhancing asset values while accessing new sources of capital. As traveler expectations rise, a hotel’s brand becomes increasingly significant. With a diverse array of 1,350 global hotel brands, effective communication and fulfillment of brand promises are crucial. Hotel owners are likely to refine their brand promises in 2024, potentially leading to brand consolidation, especially as traditional hotel brands explore new ventures beyond accommodation provision.
To read the full JLL report, click here.