Lodging Industry SWOT Analysis
Daniel Lesser, President & CEO of LW Hospitality Advisors, kicked things off with a SWOT (strengths, weaknesses, opportunities and threats) analysis of the U.S. lodging industry in 2023.
Some of the notable strengths and opportunities discussed were the strong uptick in demand for travel both domestically and internationally, the availability of refinancing, acquisition and construction financing proceeds, innovative new offerings for consumers and a market prime for investment. Weaknesses and threats included difficulty securing financing, increasing operating costs and supply chain issues, visa backlogs and economic uncertainty.
The slides below demonstrate the promising airline passenger volume which may provide increased opportunities for hotels, and the potential for innovation within the industry.
Lesser explains this should be weighed against high operational expenses and the threat of an economic downturn.
The full presentation can be downloaded here.
Performance Outlook
Luigi Major, Managing Director, Americas, of HVS, analyzed 2023 trends in the hotel industry and how current events are impacting performance and values.
After the last several years of upheaval in the hospitality industry, there are some bright spots—occupancy is slowly climbing back to 2019 levels. Group demand is on the rise, and more group travelers expect to extend trips. Last year set a new industry high for RevPAR, as ADR surpassed 2019 levels in 2022.
ADR drives RevPAR gains:
RevPar, Occupancy and ADR data for the past four years, and projections for the next three:
Some challenged faced by the industry as it recovers include the impact of rising construction costs on new hotel supply, Federal interest rate hikes, and climbing cap rates.
Different sectors and seeing different trajectories in their recoveries, compared to prior peaks:
The full presentation can be downloaded here.
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