Hotel demand in the US may slow this year after a period of strong increases that came with the recovery from the impact of COVID-19, according to Amanda Hite, president of STR, speaking on a panel at the Americas Lodging Investment Summit (ALIS) in Los Angeles.

According to Hite, the first quarter of 2023 will be the strongest by far this year, and demand will start to slow in the second quarter.

Looking at prior downturns, said Hite, history shows that for every point of GDP decline, there is a four-point demand decline for hotels. She said STR does not anticipate that kind of decline this year, but there will be a GDP slowdown, which will result in a demand slowdown.

STR now expects occupancy to be 63.6% this year, with average daily rate (ADR) to increase 2.1% and revenue per available room (RevPAR) to grow 3.7%.

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STR also made downward adjustments to its 2024 U.S. hotel forecast, though the industry is still expected to see increases next year. According to the company, US occupancy is expected to improve to 65.3% for 2024, ADR is predicted to climb 3.8% and RevPAR is projected to grow 6.6% next year.