In its 2024 State of the Hotel Industry report, the American Hotel & Lodging Association forecasts that hoteliers will pay a record amount of wages, generate a record level of tax revenue and get even closer to pre-pandemic occupancy levels. The report is based on data and analysis from Oxford Economics and was created in collaboration with AHLA Premier Partners STR, Avendra, Ecolab, Encore, JLL, Oracle and Towne Park.
An analysis for AHLA by Oxford Economics found that the U.S. hotel industry achieved a 4.8 percent year-over-year increase in RevPAR in 2023—outperforming the November 2022 projection by 1.5 percent and marking a 13 percent improvement over 2019’s pre-pandemic RevPAR level. Nationwide average daily rate also exceeded expectations in 2023, increasing by 4.2 percent year over year and outpacing the forecasted level 2.8 percent.
Several key U.S. markets, including New York City, ramped up recovery and saw significant average daily rate gains in 2023.
U.S. hotel occupancy fell short of last year’s expectations, averaging 62.9 percent compared to the forecasted 63.8 percent, driven primarily by slower recovery in business travel room nights. Still, nationwide occupancy improved 0.5 percent year over year and came within 4.4 percent of the 2019 pre-pandemic level, according to an analysis for AHLA by Oxford Economics.
Looking Ahead
- Hotels are projected to pay employees a record of more than $123 billion in wages, salaries and other compensation in 2024, up from $118 billion in 2023 and $102 billion in 2019.
- Hotels are projected to generate a record of nearly $54.4 billion in state and local tax revenue in 2024, up from nearly $52.4 billion in 2023 and $43.4 billion in 2019.
- Hotels are also expected to generate a record of $29 billion in federal tax revenue in 2024, up from nearly $27.8 billion in 2023 and $24.3 billion in 2019.
- Hotels are projected to employ nearly 45,000 more employees this year, while still employing nearly 225,000 fewer people than the nearly 2.37 million employed in 2019.
- Nominal hotel guest spending on lodging, transportation, food and beverage, retail and other expenses is expected to reach $758.6 billion in 2024, up nearly 5 percent from 2023 and almost 24 percent above 2019 levels.
- Average hotel occupancy is expected to reach nearly 63.6 percent in 2024—up from the 62.9 percent average in 2023 but short of the 65.8 percent rate seen in 2019.