RevPAR Growth Challenges in the Hospitality Sector

Current Trends in RevPAR Growth

RevPAR growth in 2024 has shown solid global performance, particularly in the APEC region with a 14.8% increase driven by ADR and occupancy. However, U.S. occupancy has declined, with RevPAR growth primarily from rate increases. Expectations indicate positive growth across segments but anticipate weak demand and pricing trends in some regions.

"Business Trends We saw solid global RevPAR growth during the 2024 second quarter and 2024 first half compared to the same periods in 2023." --- (MAR, sec filing, 2024/Q2)

"We expect positive RevPAR growth across all major segments, led by group performance at or above the high end of the range, business transient around the midpoint and leisure transient towards the lower end of the range." --- (HLT, earning call, 2024/Q1)

"In APEC, RevPAR increased 14.8 percent in the 2024 first half, driven by strong growth in ADR and occupancy from leisure and business travelers, including an increase in inbound demand into the region." --- (MAR, sec filing, 2024/Q2)

"And then I kind of have a part two of – of the question, which is just when we look at the broader STR trends and occupancy in the U.S. has been down for – it depending on how you measure a month there from sort of 7 to 12 months with all the RevPAR coming from rate increase." --- (HLT, earning call, 2024/Q1)

"We expect a continuation of current weak demand and pricing trends in the region, with the third quarter anticipated to see the most meaningful RevPAR decline as outbound travel accelerates during summer holidays." --- (MAR, earning call, 2024/Q2)

Competitive Pressures on RevPAR

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"During the first quarter, system-wide RevPAR increased 2.0 percent as renovations, inclement weather and unfavorable holiday shifts weighed on performance more than anticipated." --- (HLT, press release, 2024/04/24)

"Brandt Montour: That's super helpful. And then, just as a quick follow-up, maybe not so quick, Tony, you mentioned gain -- that you guys gained RevPAR index." --- (MAR, earning call, 2024/Q1)

Customer Behavior and Its Impact on RevPAR

Customer preferences for unique travel experiences like AutoCamps and Safaris can drive incremental engagement and positively impact RevPAR. Additionally, a strong understanding of customer behavior has led to significant growth, while national elections have minimal impact on business performance.

"I think I talked about it on the last call, so more AutoCamps, I think areas like Safaris and yes and other riverboat crews and other things because we know that our customers, those are adjunct sort of travel experiences that connect to our business that gives our base of customers, incremental things to engage with us that they want to do and is not in conflict in any way with our business, but we think is synergistic." --- (HLT, earning call, 2024/Q1)

"So we're looking at mid-60s over all of our hotels and close to 70% in the U. S. So really just tremendous growth in terms of understanding on the part of the customers" --- (MAR, conference, 2024/06/04)

"So in the business for this year, national elections don't tend to there might be a few more people who stay home around Election Week, but it tends not to have a massive impact on the business. And frankly, something that as we" --- (MAR, conference, 2024/06/04)