Hoteliers Can Look Past Storm Clouds to Sunny Days Ahead
STR Vice President of Analytics Isaac Collazo knows "there are some storm clouds on the horizon" heading into 2023, but he expects most news to be good news for the hotel industry even as the broader economy heads to a recession.
"It's just going to be different," he said. "It's just going to be a little slower growth than what we've seen over the last 12 to 18 months, but again, it's growth."
Jan Freitag, CoStar's national director of hospitality, echoed that sentiment, saying that while he doesn't like to overuse the term "unprecedented," revenue growth in a recession would be.
"In this specific instance, it may actually be unprecedented," he said.
While the hotel industry is expected to see continued strong demand this year, Freitag and Collazo said the story on how hoteliers get to that overall demand performance will be significantly different than in the recent past when historic leisure demand growth led the way to recovery.
Collazo said overall he expects leisure demand to U.S. hotels to "remain pretty stable" even as more travelers look abroad for travel opportunities.
"That's the wild card. Will people leave the U.S. or stay in the U.S.? And therefore some markets might be disproportionately impacted," he said.
Freitag said there is still strong hope that in the second half of 2023, when the broader economy could have a somewhat shallow recession in the rearview mirror, stronger corporate and group demand to hotels could emerge as a positive trend.
"Because of people not being in the office back full time, if we don't have a water cooler around which to congregate, we have to make a water cooler," he said. "And what better way to do that than at a nice resort."