The global hotel sector has shown significant recovery, with revenue per available room (RevPAR) increasing by 12.8% in the first eight months of 2024 compared to pre-pandemic levels in 2019.
However, performance disparities highlight varying regional dynamics. Europe emerged as a key growth driver, with RevPAR climbing 6.3 percentage points in recent months, buoyed by events like the Paris Olympics.
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“Major global events are critical to our recovery trajectory, offering an unparalleled boost to local markets,” said a spokesperson for JLL’s Global Real Estate Perspective.
In contrast, Asia Pacific’s progress lags, with RevPAR 10.7% below 2019 figures, despite full border reopenings at the end of 2023. Meanwhile, the Americas experienced a dip as consumer savings dwindled, though recent Federal Reserve rate cuts may bolster domestic travel over the medium term.
Shifting travel demand
Leisure travel, the post-pandemic growth engine, is starting to slow, particularly in destinations heavily reliant on resorts.
Softer leisure demand stems from tightening consumer budgets, particularly in the United States, but group and corporate travel are gaining ground. This shift signals a return to more balanced demand patterns.
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By GlobalData“Operators are adapting to a complex demand landscape,” the report notes. Group and international travel have begun to offset leisure declines, but profitability remains under pressure due to rising costs.
Despite this, high development expenses have curtailed new hotel supply, enabling existing properties to maintain elevated rates and shield revenue streams.
Long-term outlook
Looking ahead, global hotel performance is expected to stabilise, with annualised growth projected to fall below 4% in 2025. Supply constraints will play a pivotal role.
“With construction projects decreasing by 8.5% since 2019, existing hotels in urban hubs and high-demand markets are well-positioned for sustained success,” the report highlights.
Investment trends point to luxury hotels as the primary beneficiaries. Brands are targeting high-value portfolios to drive shareholder returns and expand net unit growth.
Notably, the Middle East and India are poised for outsized supply expansion, attracting heightened investor interest due to their strong demand potential.
While the road ahead presents challenges, the global hotel industry’s recovery demonstrates resilience, with evolving demand trends and strategic investments paving the way for sustained growth.
