Hospitality Capital Markets Update: December 9, 2024
Hospitality Capital Markets Update: December 9, 2024
Written by Matt Gillis , Analyst
In 2024, the U.S. hotel financing landscape has shown signs of stabilization and growth, shaped by evolving economic factors and market trends. As the industry moves into 2025, the hotel construction pipeline is projected to expand, supported by improving market fundamentals and easing financial conditions, despite stagnant supply levels in recent quarters. The Federal Reserve's rate cuts in September and November, totaling 75 basis points, have contributed to cautious optimism about economic stabilization and have helped alleviated previously constrained financing conditions. This shift is expected to help increase new hotel construction projects throughout 2025.
Moreover, while overall demand growth for U.S. hotels is projected to remain flat, business travel demand is anticipated to rise year over year. Average daily occupancy is forecasted to hold steady at 62.9%, with the average daily rate increasing by 1.3% to $160.49, according to a PwC forecast report.