The panel (from left): moderator Patrick Mayock, Amanda Hite, Liz Uber and Deanne Brand Optimism reigns despite recession cloudsBy Rob Schneider | August 18, 2023Share Executives from Extended Stay America, Host Hotels and STR discussed the opportunities and obstacles they expect the hotel industry to face in the coming year. When asked for the top trends for 2024, a trio of hotel executives talked about the relative strength of the group business, the importance of holding rate and a regional shift back to America’s largest cities.The panel at the Hotel Data Conference in Nashville consisted of Amanda Hite, who is president of Hendersonville, Tennessee-based STR; Liz Uber, who is COO of Charlotte-based Extended Stay America; and Deanne Brand, who is senior vice president, strategy, enterprise analytics and treasurer for Bethesda, Maryland-based Host Hotels. It was moderated by Patrick Mayock, vice president of product for New York-based CoStar.At the start of the session, Hite announced that STR and Tourism Economics lowered their year-over-year growth projections in the revised 2023-24 U.S. hotel forecasts.Hite said the projections were lowered half a percent to 4.5% year-over-year growth, compared to the original projection of 5%. She said the bulk of that growth has already happened in the first two quarters of 2023.Here are highlights from the session:What is contributing most to the strength of the upper upscale segment?Deanna Brand: If you look at where group [business] is, that’s been a huge tailwind for us this year… Leisure was the first to lead the way as you think about recovery. And then the next legs of the stool were business travel and group. What we’re seeing in group is an extraordinarily strong pace, and there’s still room to grow… On the business transient side, we take a look at surveys of corporate travel managers, and they’re increasing their travel budgets by 8% to 9% for the remainder of this year going into next year. And we’re seeing this improvement over weekday occupancy… those trends are a tailwind for the upper upscale tier and, obviously, urban downtown.We as an industry did a phenomenal job of holding rate… After 2008, we saw rate wars, but with the pandemic, everyone stayed in their lane and charged the appropriate pricing. I think one thing as we go forward and we keep talking about a potential recession, whether it’s this year or next year or maybe never happens… just making sure that we all stay in our lane and charge the price that’s appropriate for our segment and driving those ADRs.Liz UberShare this quoteWhat have been the trends in the extended-stay segment?Liz Uber: During COVID, extended-stay, especially the economy segment, benefited from some of the higher rents. We benefited from people doing soul-searching and trying to figure out where they should live or what they should do. In many cases, they came and stayed at a hotel for 60 days, six months, or even a year… The phenomenon we saw this year is that many of those folks were finally able to afford apartments, or they found permanent employment, and they left the hotel and moved into more permanent housing… Looking into 2024, there’s a lot of upside, and we are also seeing all of our growth in ADR. The great thing that happened during COVID is we didn’t go backward from an ADR perspective. And there’s a lot of project business coming now. The infrastructure bill from late 2021 that was passed is finally taking root, and we’re feeling very positive moving forward.What notable regional trends are worth highlighting?Amanda Hite: The big shift we’re seeing, and the softness in some subtypes of hotels we’ve seen, is because people are shifting back to cities. When you look at total room demand [during COVID], most of the room demand went outside the top 25 markets to rural or resort destinations because of the COVID impact. And that’s also where the demand was going in recovery. What we’ve seen this year is this return to normal… So that’s back to the urban centers, and part of that is business and group being a tailwind to help that. It’s not every top 25 market, but generally, urban centers are doing much better.What is an obstacle that is keeping you up at night?Uber: We as an industry did a phenomenal job of holding rate… After 2008, we saw rate wars, but with the pandemic, everyone stayed in their lane and charged the appropriate pricing. I think one thing as we go forward and we keep talking about a potential recession, whether it’s this year or next year or maybe never happens… just making sure that we all stay in our lane and charge the price that’s appropriate for our segment and driving those ADRs.Brand: Mine is more so in the near term, and I know we’re working on it, but it’s the visa wait times and the passport backlogs and opening up international travel. Our visa wait time right now is 400 days, compared to Canada, which is 55 days… The other is airlift. Pre-pandemic, there were 350 weekly flights from the U.S. to China. And that sits at 24 today.Hite: What I worry about is inflation… I look at a lot of other industries. And as we talk to friends in other industries, they’re in recession… I was at a dinner with people from a lot of other industries. And we get to me, and I’m talking about hotels, and they’re all giving me the side-eye, and I’m like, ‘Well, you were all doing pretty well with COVID!’ But, you know, it’s only a matter of time before that starts to affect travel.