Hotel pricing growth has been volatile, to say the least through the pandemic. From the troughs of -40% ADR (Average Daily Rate) decline vs 2019 levels in March 2020 to +20% above 2019 by Summer of 2022, we are now seeing the pace of hotel price growth moderating in 2023 on the back of tempering inflation rates and slowing demand growth.

2024 will not see the double-digit growth that was seen through the pandemic, but as we write in our 2024 Outlook report, “The watchword for 2024 is normalization. We expect that overall travel industry revenue growth will decelerate from eye-watering double digits. But this slow- down is not a sign of weakness. Rather it is a sign of the continued strength of the travel industry as business finally gets back to normal.”

Post-pandemic Boom May Be Over, But Rising Demand Amidst Constrained Hotel Supply Will Fuel Hotel Price Hikes Above Inflation in 2024

We expect hotel prices to continue rising in 2024 due to 3 key reasons:

1. Hotel prices haven’t yet displayed any real pricing strength above inflation
2. Occupancy levels have not recovered yet to pre-Covid levels, with occupancy recovery aiding further RevPAR growth
3. Supply growth continues to be more constrained than demand growth and this should further aid hotel pricing power

1. Hotel Pricing Growth Slowed In 2023
2. Post-pandemic Boom May Be Over, But Rising Demand Amidst Constrained Hotel Supply Will Fuel Hotel Price Hikes Above Inflation in 2024
3. Conclusion