The U.S. hospitality market remains as dynamic as ever. As 2025 draws near, here are some of the key trends we are monitoring closely:

• Record travel volumes are not trickling down to market- and asset-level performance.
• In 2023, U.S. travel abroad nearly matched the record levels seen in 2019. According to the National Travel & Tourism Office, Americans are spending more than ever during these trips.
• In contrast, the number of international visitors to the U.S. remains well below 2019 levels.
• ADR and RevPAR growth has not kept pace with inflation over the past year through Q3.
• After some recent softness, airline tickets are on the rise, outpacing the rate of inflation.
• Recent and ongoing labor disputes are driving up operating expenses as unions win concessions.
• New brands, such as AC and Moxy by Marriott, Home2 Suites and Tru by Hilton, and TRYP by Wyndham, are outperforming previous-generation brands within the same chain scales.
• Capital is shifting. The top markets for sales volume year-to-date through Q3 were Phoenix, Orlando, and Honolulu. Only Phoenix landed within the top 10 last year, while Honolulu ranked 58th in 2022.
• Borrowers’ average debt costs have declined over the past two years. With the Fed broadcasting additional cuts, this should spur further trading activity.
• Amid the nationwide housing shortage, increased regulation of short-term rentals is gaining traction. This move would likely boost hospitality performance at the local level, particularly ADR.