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Source Cushman & Wakefield
While uncertainty still lingers from the impact of COVID, a post-pandemic restructuring of travel and work is resulting in a new normal for the lodging industry. Finding Normal
Overall, 2023 saw the lodging sector trending toward stability while incorporating some major structural shifts in demand. While uncertainty still lingers from the impact of COVID, a post-pandemic restructuring of travel and work is resulting in a new normal for the lodging industry. Hybrid work routines are becoming institutionalized, virtual meetings continue, and in-person business travel has diminished. Overall travel continues to improve, still driven by the leisure surge of the early 2020s, and on-site meetings and conferences have become the new business travel. The lodging performance paradigm is shifting but is not stagnant.
Hotel performance on a national basis has stabilized, and barring any unforeseen event, is expected to continue to improve over the next few years. Current hotel investment sentiment ranges from “over the worst” to “cautiously optimistic” to “optimistic.” There is the sense that the disruption from the pandemic has normalized and although revenue performance has ratcheted down from 2019, top line revenue growth is now more predictable. While expenses, particularly labor and insurance, remain a concern, adjusting to a more durable financial trend is the new positive outlook. If interest rates decline, the hotel investment paradigm will be more attractive to all.
