Global Hotel Inventory Has Jumped 18% In The Last Decade
The global hotel market has experienced a 17.7% increase in hotel room inventory over the last decade, a strong indication that the industry is still proving attractive to both investors and developers worldwide.
An emerging middle class coupled with more disposable income has fueled travel and tourism demand, boosting demand for hotel and lodging accommodations as well.
"It is better living conditions in general with higher incomes around the world. With that comes the desire to travel and that is then followed by entrepreneurs and developers who say let me accommodate that,” STR Senior Vice President Jan Freitag told Bisnow.
Average global hotel occupancy for the year ending in February was 67.5% — up 1.6% from the year prior. The average daily rate also grew by 2.6% and is now sitting at $122.96, according to a report by STR.
As for U.S. hotel demand, it is too early to tell if recent tax cuts contributed to the jump in consumer income. Freitag did say there has been a slight pickup in the growth of gross domestic product, which in turn often leads to room demand growth.
“The tax cut was targeted at the upper-income brackets so it is not clear how much of that will trickle down to room demand," Freitag said. "That said, a lot of corporations have given their workers one-time bonuses and it is probably fair to assume that some of those bonuses will be used for leisure travel."