Performance accelerates above pre-pandemic levels

Global Real Estate Perspective August 2023

Global revenue per available room (RevPAR) increased by 10.5% relative to 2019 over the first five months of 2023. Almost all regions are now fully recovered to pre-pandemic levels with EMEA leading the way, followed by the Americas. While Asia Pacific is yet to fully return, performance has surged since the reopening of China earlier this year, with regional RevPAR currently down only 6.8% from 2019. Despite macroeconomic volatility global hotel performance should continue to improve, underpinned by the re-emergence of group, corporate and international travel.

This article is part of JLL’s Global Real Estate Perspective

As the top-performing region worldwide, EMEA continues to see robust inbound travel across most of its subregions. Demand for urban markets has also picked up, particularly in the luxury sector in cities like Rome, London and Paris. With the second strongest performance recovery relative to 2019 across all global regions, the Americas has also shown resilience to macroeconomic headwinds as travelers continue to prioritize travel spending. Following China’s reopening in January 2023, intraregional tourism within Asia Pacific has increased rapidly, resulting in RevPAR reaching a 93.2% recovery relative to 2019.

Future trends: Technology adoption intensifying

Short-term: Despite economic volatility the global lodging industry remains resilient. In the first five months of 2023 RevPAR has exceeded 2019 levels by 10.5%. This momentum is expected to continue through 2023, particularly in gateway and urban markets as international borders have fully reopened. Muted supply growth, mainly in the Americas and Europe, will create opportunities to drive rates further and allow hotels to increase profitability and mitigate ongoing margin pressures. Luxury hotels are poised to reap the benefits of the ongoing increase in global wealth and a higher proportion of consumers' discretionary income being allocated to travel instead of other expenditures.

Long-term: The lodging industry’s adoption of technology has surged in recent years, driven by the desire to enhance the guest experience and streamline workflows. Hotels are leveraging a range of innovative solutions including virtual tours, self-service kiosks, predictive analytics and AI-powered chatbots to offer guests greater accessibility and personalization. The integration of digital platforms is also transforming workforce processes, empowering employees with new skills and automating time-consuming processes.