US hotels are projected to see an unprecedented increase in wage expenditures and tax revenue in 2024.
The American Hotel & Lodging Association (AHLA) latest report predicts ongoing difficulties for hotel owners caused by labor shortages throughout the country as they approach occupancy levels comparable to 2019.
Top 2024 State of the Hotel Industry report findings include:
• US 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 nearly $52.4 billion in 2023 and $43.4 billion in 2019.
o The 2024 projection includes more than $26 billion in lodging-specific taxes.
• Hotels are also expected to generate a record of $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 nearly 225,000 fewer people than the nearly 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% from 2023 and almost 24% above 2019 levels.
• Average hotel occupancy is expected to reach nearly 63.6% in 2024 – up from the 62.9% average in 2023 but short of the 65.8% rate seen in 2019.
• Nominal revenue per available room is expected to reach $101.82 in 2024, up 4% from 2023 and more than 17% from 2019.
• The pace of inflation has slowed, but prices remain elevated for a number of hospitality-related products, and single-digit inflation is expected through at least the first two quarters of 2024 for a range of items.
• 47% of meeting professionals are increasing budgets for 2024, while 40% expect budgets to remain flat, according to Quarter 4 2023 Planner Pulse survey.
The year 2023 marked a significant recovery for hotel owners, and industry analysts’ projections indicate that the industry is positioned to further capitalize on that success in 2024. Anticipated increases in occupancy rates and record-breaking levels of wages and tax revenue highlight a promising future. However, hoteliers are confronted with ongoing obstacles such as a nationwide shortage of labor, persistent inflation, elevated interest rates, and a federal regulatory agenda that imposes additional challenges on their operations.
