Hotel industry experts predict occupancy and ADR to remain stable despite declining demand reliability

ofHospitality Industry Sentiment (HIS) Survey is STR’s quarterly survey capturing the experiences and expectations of travel industry professionals. The study was launched in Q4 2022 and the fifth edition was completed in Q1 2024, but while some trends have solidified, others appear to be reversing direction. It looks like

Every quarter, we ask our global community of travel industry experts to assess overall business confidence for the next three months (short term), next year (medium term), and the next two years (long term). compared to Previous iteration of this study in Q4 2023overall business confidence remains stable over the next 12 months, with 35% of respondents rating their confidence an 8 or above on a 10-point scale.

However, on average, short-term and long-term business confidence ratings continue to trend downward. Long-term ratings remain the most optimistic, with 46% of respondents rating their confidence at an “8” or higher in the latest survey. But long-term confidence has also seen the largest and most consistent decline since the survey began.

Using only the average rating on a 10-point scale may mask certain trends, so it’s worth looking at the results at both ends of the rating scale. In this case, the trend for optimistic ratings (above 8) closely mirrors the average rating results above. On the other hand, less optimistic ratings (defined as 4 or below on a 10-point scale) showed a worrying upward trend, especially in the short term, with 20% of respondents saying their confidence was wavering. It shows that there is.

Expectations for different demand segments also vary. Projections for business temporary demand and group demand growth have been on a steady downward trend since this question was added to his survey a year ago. However, expectations in each of these segments remain relatively optimistic. Nearly 60% of respondents expect growth in the business temporary travel segment, with nearly two-thirds indicating optimism about growth in group demand.

On the other hand, expectations for temporary growth in leisure are low. However, in the latest survey, a (albeit small) majority of respondents have a positive outlook for growth.

Finally, respondents’ expectations regarding hotel occupancy and average daily rate (ADR) paint an overall optimistic picture. Overall, these predictions did not change significantly between the past two iterations of this study. In relative terms, occupancy forecasts for Q2 2024 are the least optimistic, although 46% of respondents expect at least 1-2% year-over-year growth in the quarter. Adding in those who expect occupancy to be “about the same,” 75% of respondents expect occupancy to at least match the levels recorded in Q2 2023. Looking further into full year 2024, expectations improved even further to 54%. Growth is expected to be more than 1-2% compared to 2023.

There are even more optimistic expectations for ADR growth. Approximately 62% of respondents expect his 2024 second-quarter rate increase, which improves to his 70% who expect a full-year 2024 rate increase. In each period, at least 80% of respondents expect interest rates to be equal to or higher than the interest rates recorded in his comparable 2023 period. .

One notable trend in the graph above is that while most respondents do not expect occupancy and ADR to decline on a quarterly or annual basis, a growing number of respondents expect a significant decline. A slight increase was observed. The percentage of respondents expecting occupancy to decline by 5% or more each quarter rose to 10%, and to 7% for all of 2024. For ADRs, there has been no significant change in expectations that they will decline overall in 2024, but the overall percentage of respondents expecting a decline (of any amount) on a quarterly basis has risen to 20%.

For now, these percentages are small, but these results are worth noting in the next edition of this study, which will be launched soon. If you would like to participate in this research, please click here Sign up for survey invitations (sent only once per quarter). Complete the survey and we’ll send you an exclusive report of your results every quarter.

This article was first published STR.