U.S. Travel & Lodging Sector Update

The U.S. lodging industry continued its path of positive performance since the outset of the pandemic. In 2023, the industry recorded its highest occupancy levels since 2019 and the highest ADR (Average Daily Rate) on record, leading to a RevPAR of $97.97, a growth of nearly 5% over 2022. Lodging supply growth is expected to be minimal over the next couple of years which bodes well for the industry's future prospects despite lagging recovery of business travel and international visitation. However, numerous challenges remain, from labor shortages, rising insurance costs, and deferred PIPs (Property Improvement Plan) coming due, to brand overflow, high cost of capital, and recessionary concerns.