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Special Report

Hospitality National Report

Midyear 2023

Travel Trends Resuming More Familiar Pattern,
Propels Hotel Room Demand to Record Heights

Revenue gains return to sustainable levels. Travelers have continued to flock to hotels in greater numbers so far in 2023, as wage growth and consumer confidence largely offset inflation pressures in vacations and other trip planning. Roughly 634 million room nights have been booked through the first half of this year. This marks a 2.6 percent increase relative to the same time frame in 2022, and estimates suggest total room demand will reach a new all-time high this year. As of June 2023, both ADR and RevPAR were roughly 17 and 12 percent higher than their pre-pandemic peaks. Occupancy nevertheless remains 250 basis points below the 2019 rate, as a tight labor market has limited capacity in some hotels. While key performance indicators recorded historic gains during 2021 and 2022, growth levels are expected to moderate and closely align with their long-term averages this year, as the resumption of student loan payments and higher interest rates may slow room demand in the fourth quarter. 
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