After 2023 when RevPAR levels fully recovered after the pandemic, global hotel performance is tipped to experience further growth this year. Watchwords in 2024 will be sustainability, wellness and authenticity. In addition, a hotel’s brand will be of the utmost importance.
Excellent results in 2023
Last year was generally a good one for the hotel sector. With the almost complete return of international travel in all corners of the globe, hospitality experienced solid income levels and a surge of new investors.
RevPAR ahead of 2019 levels
According to the JLL Global Hotel Investment Outlook 2024, global hotel performance soared last year. RevPAR recovered completely from the pandemic, with 2023 levels 19% higher than those registered in 2019, just before the pandemic.
Notable increase in new investors
In addition, the Outlook reports that the sector attracted many first-time hotel buyers last year. Their 19% market share was the highest on record, “underpinned by significant dry powder on hand”. As a result, private equity made up the highest proportion of hotel investment.
Predictions for global hotel performance this year
JLL predicts “further growth in 2024” for global RevPAR. This additional increase to the 19% rise in 2023 will come mainly from leisure travel. However, the report includes the forecast from the Global Business Travel Association that revenue from business travel will return to pre-pandemic levels this year.
Trends among leisure travellers in 2024
According to JLL, consumer tendencies will include the following this year:
Prioritisation of travel – the report believes consumers will “continue to exhibit a propensity to spend on travel above all else”.
Prioritisation of personal values – the consumer will also give precedence to travel and holidays that “align with their personal values”.
Commitment to sustainability – consumers increasingly place importance on the need for more conscientious travel. JLL states that hotels that “clearly articulate a commitment to sustainability, wellness and authenticity will have a competitive advantage”.
Importance of brand – consumers will focus more than ever before on the brand behind a hotel and anticipate it will meet their expectations.
Hotel investment in 2024
On the back of strong global hotel performance in 2023, JLL predicts investment in the sector to soar this year. It forecasts a 15 to 25% rise compared to last year’s figures, with the Americas as the region set to experience the highest growth.
JLL believes investors will prioritise three types of hotel investment this year: luxury assets and establishments offering select service and/or extended stay types of accommodation. Digital nomads will continue to feature as a growing force among hotel users, reflecting “the continued blurring of lines between living and travelling”.
Among investor types, high net-worth individuals and family offices are the most likely “to invest heavily in the sector,” according to the report. Finally, JLL comments that the hotel investment sector is optimistic, and most investors expect “to be net-buyers over the next 12 months”.
It recommends “prioritising innovation and remaining nimble” as the two best ways to invest in the best assets and benefit portfolios.
(Source: JLL)
