Last year was an exceptional year for group bookings and the industry as a whole. In the United States, RevPAR and ADR both grew by 1.7%. Occupancy finished at 63%, which was on par with 2023.

As of December 2024, global RevPAR was up 6.7%. EMEA had a strong year, with RevPAR showing gains in all but six weeks of 2024.

Increased costs are shrinking hotel margins with labor being the primary cost driver. Costs associated with A/V, food and beverage, and other ancillary items remain elevated after being driven upward by inflation.

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Hotel staffing is hovering around 90% of 2019 levels, while wages are up on average roughly 30%. ADR also continues to grow at a rate less than that of inflation, putting additional pressure on owners. In addition, brand consolidation remains very prevalent, and we expect this to continue for the foreseeable future. Hotel transactions are expected to tick upwards in 2025, despite political and socio-economic uncertainty.

The disparity between U.S. inbound and outbound international travel remains wider than forecasted, with outbound travel continuing to overperform, while inbound travel is recovering slower than anticipated.

In 2025, we expect to see additional growth, with RevPAR increasing just under 2%, driven by ADR growth of approximately 1.6%. We anticipate continued strong group demand, while leisure travel continues to stabilize. Optimism seems to be the general theme throughout the industry for 2025.