The 15th Annual Hotel Data Conference in Nashville brought many interesting perspectives on trends that will shape the coming year in hospitality.  CoStart selected five slides from the conference that provide some important data points for operators.

Published by: CoStar News/Jan Freitag
Published date: August 2023

The sell-out crowd at the 15th annual Hotel Data Conference in Nashville came to learn about the major trends shaping the year ahead as they listened to presentations and panel discussions. Here is a list of five slides, in no particular order, that provide operators with important data points as they budget for 2024.

At the beginning of the year, predicting a recession for the later part of 2023 was decidedly mainstream, but the tenor of industry observers has now changed towards expecting a “soft landing.” Not so for Oxford Economics, whose inputs drive the CoStar forecast. The CoStar house call is still for a recession, expected to hit later this year. As the quarterly forecast shows, occupancy is expected to decline for two consecutive quarters, and room rate is expected to grow at around the rate of inflation.

The good news is that the recession is forecasted to be very mild by historic standards. This should allow for relatively quick revenue acceleration in the later part of next year, driven mostly by room rate recovery.

In a recent survey conducted by STR, CoStar Group’s hotel analytics company, over 70% of operators said that the expectation for a recession had a minor or some impact on their budget planning. The old saying “No one ever got fired for buying IBM” applies here — no one ever got fired for having a Plan B budget with a downside scenario. CoStar’s historical hotel data includes four economic downturns: early 1990s, 9/11, Great Recession and the pandemic. Operators can use the past data for their markets and, if available, their own properties to form an opinion of the impact of an economic slowdown on their occupancy and rate.

Weekday revenue per available room, or RevPAR, is recovering and the share of weekday demand is rapidly normalizing. This implies that more business travelers are on the road looking to connect with team members, clients or suppliers. The Transportation and Safety Administration, or TSA, continues to publish airport screening counts that mirror or surpass 2019 results. Urban hotels are fuller midweek than they have been, while resort hotels are still seeing healthy weekend demand but softening midweek occupancies.

As the push-pull between RTO, or return to office, and WFH, or work from home, goes into its fourth year, another trend seems to be taking hold: smaller off-site meetings. Certain job functions clearly benefit from face-to-face interactions, so it is no wonder that many teams and departments are making in-person meetings a priority. Before the pandemic, such meetings typically occurred in the office, except for larger meetings with out-of-town staff. More recently, get-togethers that need smaller off-site meeting spaces are occurring more often as staff members have moved further away from the office, pointing to new demand patterns emerging, often with a much shorter booking windows than previously anticipated.

Short-term rentals continue to grow but the new inventory is skewed towards larger houses and not studio or one-bedroom apartments. This speaks to the attractiveness of multi-generational travelers and other social groups for rental owners who offer larger accommodations. Especially for social get-togethers, hotels are often perceived as being too expensive or not private enough. The shift towards much larger homes is also the reason that short-term rental companies seem to show much stronger room rate growth, but when zeroing in on comparable accommodation, the price growth of one-bedroom apartments in the short-term rental market mirrors that of hotel rooms. The trend towards larger houses in short-term rental markets is likely to continue in 2024.