Hotels are projected to pay a record amount of wages and generate a record level of tax revenue in 2024, according to the American Hotel & Lodging Association’s 2024 State of the Hotel Industry report.
The report, which forecasts that hoteliers will face continued challenges due to nationwide labor shortages while inching closer to 2019 occupancy levels, is based on data and analysis from Oxford Economics and was created in collaboration with AHLA Premier Partners STR, Avendra, Ecolab, Encore, JLL, Oracle, and Towne Park.
Top findings include:
Hotels are projected to pay employees a record of more than $123 billion in wages, salaries, and other compensation in 2024, up from $118 billion in 2023 and $102 billion in 2019.
Hotels are projected to generate a record of nearly $54.4 billion in state and local tax revenue in 2024, up from almost $52.4 billion in 2023 and $43.4 billion in 2019.
The 2024 projection includes more than $26 billion in lodging-specific taxes.
Hotels are also expected to generate a record $29 billion in federal tax revenue in 2024, up from nearly $27.8 billion in 2023 and $24.3 billion in 2019.
Hotels are projected to employ nearly 45,000 more employees this year while still employing about 225,000 fewer people than the almost 2.37 million employed in 2019.
Nominal hotel guest spending on lodging, transportation, food and beverage, retail, and other expenses is expected to reach $758.6 billion in 2024, up nearly 5 percent from 2023 and almost 24 percent above 2019 levels.
Average hotel occupancy is expected to reach nearly 63.6 percent in 2024 – up from the 62.9 percent average in 2023 but short of the 65.8 percent rate seen in 2019.
Nominal revenue per available room is expected to reach $101.82 in 2024, up 4 percent from 2023 and more than 17 percent from 2019.
The pace of inflation has slowed, but prices remain elevated for several hospitality-related products, and single-digit inflation is expected through at least the first two quarters of 2024 for a range of items, according to AHLAPremier Partner Avendra.
AHLA Premier Partner Encore reports that 47 percent of meeting professionals are increasing budgets for 2024, while 40 percent expect budgets to remain flat, according to the company’s Quarter 4 2023 Planner Pulse survey.
“2023 was a significant comeback year for hoteliers, and our outlook for 2024 shows the industry is poised to build on that success,” commented AHLA President & CEO Chip Rogers in a released statement.
“The expectation of higher occupancy rates and record amounts of wages and tax revenue point to a strong future. But hoteliers face continued challenges, including a nationwide labor shortage, persistent inflation, high interest rates, and a federal regulatory agenda that’s making it harder for hoteliers to do business. AHLA will continue to advocate for hoteliers at all levels of government to solve these problems and keep our industry on an upward path.”
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