U.S. Hotels Face Zero Growth, Luxury-Budget Gap Widens
Photo Credit: A guest room at a luxury hotel, the Waldorf Astoria Costa Rica Punta Cacique. Hilton
Skift Take
While hotel executives touted resilient business models and record development pipelines this earnings season, the underlying data showed an industry increasingly dependent on wealthy travelers.
The second quarter painted a tale of two hotel industries, with luxury properties commanding premium rates from affluent travelers even as budget and midscale hotels grappled with declining demand and razor-thin margins.
U.S. hotel revenue per available room growth (RevPAR) flatlined, with a -0.1% forecast for this year, according to CoStar. Yet the industry's performance diverged sharply along economic lines, with luxury hotels posting solid 3% to 7% RevPAR gains while economy properties declined 1% to 3% across the major hotel groups.
Here's what we learned from second-quarter earnings for the seven largest publicly held hotel companies.
Geographic and segment diversification was crucial, with hotel groups with a broad international presence and a range of hotel types showing better RevPAR performance in general. Development momentum remains exceptionally strong despite RevPAR headwinds. Loyalty programs continued to emerge as major value dr
