It’s officially summertime here in the U.S. but the news and business cycles haven’t slowed down one bit.
So let me make your lives a little easier this week and share a quick summer reading list to catch you up while you enjoy a nice glass of lemonade on the porch.
The Taylor Effect
Even MCR CEO Tyler Morse is a self-proclaimed Swiftie. Like most hoteliers, he isn’t turning his nose up at the business her current tour is generating. “I think Taylor Swift is going to increase RevPAR in the United States by 1%,” he said from the NYU International Hospitality Industry Investment Conference stage last week.
He may not be far off. Hotel general managers in cities the Eras Tour have visited so far say the Taylor Effect is “bigger than even the Super Bowl,” reported HNN’s Trevor Simpson. And she’s only just passed the halfway mark of her North American tour leg.
Simpson spoke with hoteliers who reported 500% food-and-beverage increases, 200% week-over-week occupancy, and more record-breakers. Her hometown tour stop in Nashville grew baseline occupancy by 33%, revenue per available room by 101% and average daily rate by 51% in the Music City.
Despite Taylor’s Tour, Leisure Demand Is Normalizing
Last week, a big topic at the NYU conference was leisure travel, and speakers on the main stage were careful to use the descriptor “normalizing” rather than “slowing down.” The context is that it’s the domestic leisure travel normalizing a bit, which is entirely expected.
The best-case leisure scenario of course is that inbound international travel will pick up the slack, but that recovery is a mixed bag, CEOs said at the conference. West Coast cities, which typically benefit from Asian tourists, aren’t seeing the boosts yet, though there’s plenty of optimism it’ll happen.
And guys, inflation is real and having a real impact. STR’s revised forecast calls for 3.5% average daily rate growth in 2023, but that doesn’t keep pace with inflation, meaning that real rates at 2019 levels won’t necessarily be on the docket for 2023. You can tell that to your friends outside the industry who complain about the 'greedflation' of hoteliers who keep raising prices.
Hotel Deals Aren’t Happening
It’s as simple as that. The regulatory environment in the U.S. is keeping transactions down. If you don’t believe us, believe the Industry Real Estate Financing Advisory Council, or IREFAC.
Also as projected, some hotel owners are beginning to wonder whether loan payments are the best idea. But while high interest rates are definitely a deterrent, most analysts say that Park Hotels & Resorts' latest move is a San Francisco issue, not a Park Hotels issue.
… And Yet, Optimism Prevails
If you haven’t listened to our Hotel News Now podcast featuring STR’s Isaac Collazo and CoStar’s Jan Freitag — yes, yes, we’re still all related here at HNN, CoStar and STR but we have to make these distinctions — you must.
If there ever were two industry insider voices simply meant for the podcast format, it's these two. They are smart, they're insightful, they're quick and you'll end up with all the color you need on all of these topics and more.
What have you been reading? Email me, or find me on Twitter or LinkedIn.
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