If you’re in the hospitality business right now, it’s a good time to be targeting an affluent clientele — and it’s less of a good time to be in the budget lodging business. That’s one of the big takeaways from an analysis of the current state of the industry by David Eisen at Hotels. Eisen builds on comments made earlier this month by Hilton CEO Chris Nassetta, who addressed the economic aftereffects of the pandemic on his industry.
“Checking accounts were full of money coming out COVID. Well, they’ve spent all that money and now they’re borrowing more,” Nassetta said on a recent earnings call. “They have less disposable income and capacity to do anything, including travel.”
Hotels‘s analysis goes on to incorporate revenue per available room (RevPAR) data from the analytics firm CoStar Group. As of June 2024, RevPAR was up 2.1% for luxury hotels, 2.4% for upper upscale hotels and 2.0% for upscale hotels. Economy hotels were down 4.4% in the same period, while midscale hotels were down 1.4%. Eisen also points to another reason for the current state of hotels’ ups and downs: the strength of the U.S. dollar overseas is prompting some travelers to do more international and less domestic travel.
Christian Louboutin Is Making Another Investment in Luxury Hotels
The acclaimed fashion designer just invested in Experimental GroupIt’s not hard to see the effects of this play out in the way that the hospitality industry is expanding — and where investments are being made. Earlier this year, luxury hotel group Rocco Forte Hotels revealed plans to increase its U.S. presence, and New Orleans’s Drifer was recently sold to an ambitious group of investors. Even the ongoing revival of motels around the country, as the New York Times pointed out, involves transforming some previously-humble properties into higher-end establishments. It’s a trend to keep an eye on for an industry in flux.
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