September 2024 | Volume 25 #229
The Voice of Asian American Hoteliers
Joining the campaign
Associations push advocacy in light of presidential election
Hotel companies in the news include:
Auro Hotels, Reha Hotels LLC, Krins, Inc., Kenny Group LLC
Everything and
the kitchen sink
FF&E selection impacts guest
satisfaction, reputation and success
Hihotels focuses on
communication
Its advisory council targets network growth
via stronger partnerships
16
Genuine Relationships. Real Results.®
Contact Matthew Hostetler, Chief Development Officer, [email protected] / redrooffranchising.com
F R A N C H I S E E
S U C C E S S S T O RY
KENISH PATEL
CAME TO THE US IN 2001.
WENT FROM FRONT DESK
TO GM IN ONE MONTH
S U C C E S S S T O RY
OPENED
FIRST HOTEL
IN 2010
CONVERTED
TO RED ROOF
IN 2018
NAMED OPERATOR OF THE YEAR IN 2020
INDEX
103.5%
REVPAR $38.77*
OUTSTANDING
BRAND
CONTRIBUTION**
45.5%
Red Roof Inn
HomeTowne Studios
When I was a child, I would make
hotels as projects. I called them
Kenish Hotel. Today, MY KENISH
HOTEL IS A RED ROOF.
*STR Average Revenue per Available Room Index based performance for all Affiliate-Owned and Franchised Red Roof Inns open and operating for at least one year and for all of calendar 2023 with any temporary closures being less than 90 days, 499 hotels. **The Brand Contribution is
the percentage of room revenue generated for the properties through the Red Roof Inn website, call center, group bookings, National Sales, Global Distribution systems (GDS), third party websites and by RediRewards members booked directly with Affiliate-Owned properties operating
for at least 1 full year and all of calendar 2023 with any temporary closures being less than 90 days, 65 hotels. This is not an offer. No offer or sale of a franchise will be made except by a Franchise Disclosure Document first filed and registered with the applicable authorities. For New
York: An offering can only be made by a prospectus filed first with the Department of Law for the State of New York. Such filing does not constitute approval by the Department of Law. For Minnesota: #F-5824. Red Roof Franchising, LLC, 7815 Walton Pkwy, New Albany, Ohio 43054.
© 2024 Red Roof Franchising, LLC
HomeTowne Studios by Red Roof® and Red Roof Inn® /
HomeTowne Studios by Red Roof® Dual-Branded Property
O W N E R
8/16/24 3:59 PM
8/16/24 3:59 PM
As the American people go to the polls to vote
this November, hotel industry associations
such as AAHOA and the American Hotel &
Lodging Association continue to advocate for
proposed legislation they say will benefit the
industry.
Cover Story
News
Franchise Relations
Design
Product Feature
20 | Joining the campaign
Associations push advocacy in light of
presidential election
5 | ‘Protect NYC Tourism Coalition’
marches against hotel bill
Industry associations say the legislation will
harm New York’s hotel
and tourism industry
6 | Blackstone, AAHOA buy majority
stake in M3
The deal is AAHOA’s first large strategic
investment and the association expects
to give members greater access to
technology
8 | IHG revenue rises amid U.S. market
recovery
The company's U.S. RevPAR turned positive
from April, increasing 2.5 percent in Q2
9 | Hilton’s net income, RevPAR and
pipeline rise in Q2
Second-quarter occupancy in the U.S. rose
to 76.8 percent, ADR to $172.36, and
RevPAR to $132.33
10 | CBRE cuts RevPAR growth forecast to
1.2 percent for 2024
The research group remains optimistic that
RevPAR will hit a record $100.54 this year
STR, TE project positive growth for U.S.
hotels in 2024-25
The 2025 occupancy growth projection was
increased by 0.2 percentage points
11 | Resolute Road, Choice host
investment forum in Dallas
About 100 hospitality executives discussed
the future of the extended-stay market
16 | Hihotels focuses on communication
Its advisory council targets network growth
via stronger partnerships
18 | Luxury in the Twin Cities
Hawkeye’s Cambria in Minneapolis finishing
second year in style
26 | Everything and the kitchen sink
FF&E selection impacts guest satisfaction,
reputation and success
On the cover
12 | Sonesta launches rebate program,
signs new franchisees
The company will credit the incentive
quarterly on franchise fee statements
14 | Shatterproof to recognize STR’s Hite
at ALIS
She will receive the award at the Hospitality
Heroes Reception on Jan. 29
15 | U.S.-India sign pact to boost MSMEs
in global market
AAHOA praised the agreement for its role in
supporting small businesses,
including hotels
COMING
NEXT ISSUE:
Super 8 celebrates 50th anniversary
Contents
05
10
12
13
18
16
Gujarati translation of top stories
begins on page 30
www.asianhospitality.com
September 2024 | Issue 229
8/16/24 3:59 PM
8/16/24 3:59 PM
08
ISSN 1938-8837
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Not a drop to drink
t 10:30 p.m. on a Saturday night about a month ago, my wife
noticed a growing puddle of water behind our washing machine
in our laundry room. I quickly shut off the water to the machine,
but the water kept dripping.
Then I felt the wall and noticed it was warm, and quickly realized
that the problem was much bigger. On the other side of the wall is our water
heater, and sure enough I found that the outlet pipe at top had sprung a leak.
More bad news followed when I learned that the shut off valve for the tank
no longer worked, so I had to shut off water to the entire house. At 10:30 on a
Saturday night.
That Sunday was bleak, to say the least.
Fortunately, we were able to fill a couple of ice chests with water from our
kind neighbor’s garden hose to use to fill toilet tanks when we flushed (which
was only when absolutely necessary, if you know what I mean). We ran to the
store the next day to grab some more drinking water, then hunkered down for
a day and a half of deprivation until the plumber could come.
It was hardest on my oldest daughter who was working all weekend and
never had a chance to take a shower. The rest of us were able to shower at the
neighborhood pool house.
We also had a pile of dirty dishes left over from Saturday night’s dinner (I
was washing them when we discovered the leak). Instead of cooking a Sunday
dinner we grabbed some Bojangles chicken, so that’s not bad.
By Monday afternoon we were back in the flow of things, so to speak, but a
lesson was learned: We are certainly a little spoiled here in the U.S. Over the
summer we also experienced a protracted AC breakdown that underscored
my family’s dependence on modern convenience.
It makes me appreciate what we have and more keenly aware of the fact that
we could easily lose it. We are a nation at peace and even if the economy gets
bumpy we still have plenty. At the same time, there are children in this country
who go hungry except for their lunches at school.
So here’s hoping the lights stay on and the toilets keep flushing in all or
our homes, and best wishes to the millions of people who do not have such
luxuries!
Edward J. Brock, Senior Editor
Follow Asian Hospitality online...
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Editor's Letter
04
www.asianhospitality.com
September 2024 | Issue 229
05
News
www.asianhospitality.com
September 2024 | Issue 229
ore than a thousand
hotel owners,
workers and small
business owners from the
newly formed "Protect NYC
Tourism Coalition" rallied on
the steps of New York's City
Hall on Sept. 12 to protest
the city council's "Safe
Hotels" bill. The coalition
also sent a letter urging the
council to reject the bill, also
known as “Int. 991”, arguing
that the bill threatens the
sustainability of New York
City's hotel and tourism
industries and jeopardizes
the livelihoods of thousands
of workers.
The coalition includes
members from AAHOA, the
American Hotel & Lodging
Association, the Hotel
Association of New York
City, the Real Estate Board
of New York, the Coalition for Hotel
Subcontractors, the NYC Minority
Hotel Association, the National
Association of Black Hotel Owners,
Operators, and Developers, along
with other groups and stakeholders
supporting New York City’s tourism
industry.
First introduced by Councilwoman
Julie Menin over the summer, Int. 991
is presented by supporters as a “simple
licensing bill.” Opponents argue it
would impose operational mandates
that could drive many hotels out of
business, jeopardizing 42,000 hotel
jobs and nearly 260,000 jobs supported
by the industry, along with billions in
revenue for New York City.
AAHOA treasurer Rahul Patel, joined
by AAHOA Northeast regional director
Preyas Patel and Mid-Atlantic regional
director Mahendra Patel, voiced
industry concerns about the proposed
act.
"The Safe Hotels Act was not created
in good faith, or the city council
would have reached out to us and our
members," Rahul Patel said. "This act
the city council is trying to pass will
destroy our livelihoods. It not only hurts
small businesses but will also harm
thousands of hospitality employees in
the New York City area."
He noted that hotels in Manhattan
contributed more than $2.3 million in
state and local taxes in 2021 and $7.2
million to the GDP. These numbers
demonstrate how vital small hotels are
to the local economy.
"I extend my deepest gratitude to
Rahul Patel, our hospitality leaders,
and the hundreds of supporters who
rallied today," said Miraj Patel, AAHOA’s
chairman. "It is my sincere hope that
the city council will listen to our voices
and collaborate with us to find balanced
solutions that benefit everyone. AAHOA
stands ready to partner in this process."
"The Safe Hotels Act, as it stands,
poses a serious threat to our members'
businesses and their livelihoods and
threatens to undermine that economic
engine at a time when the industry
is still recovering from
unprecedented challenges,"
said Laura Lee Blake,
AAHOA’s president and CEO.
‘Legislation causes
irrevocable damage’
“This legislation will cause
irrevocable damage and
hurt thousands of guests,
hotel owners, workers, and
small business owners who
support New York City’s
hotel and tourism industry,”
said Kevin Carey, AHLA’s
interim president and CEO.
“The economic toll of this bill
will reverberate for years,
forcing hotels to lay off hard-
working staff, raise rates,
and even permanently close.
This is not a licensing or
safety bill—it’s a government
takeover of New York City
hotels, and we will not stop fighting
until it’s defeated.”
“Int. 991 is a solution in search of a
problem. It imposes staffing mandates
that most hotels cannot afford, forcing
closures and disrupting hotel lending
and transactions,” said Vijay Dandapani,
Hotel Association of NYC’s president
and CEO. “This bill harms the financial
health of hotels and threatens the
sustainability of New York’s tourism
industry. The City Council should be
working with us, not against us, to
support job creation and economic
recovery.”
The coalition also emphasized the
safety protocols already in place at
member hotels and the industry’s
commitment to ending human
trafficking.
In August, New York hoteliers
Mukesh and Nikul Patel formed the
NYC Minority Hotel Association to
oppose the proposed law, calling it
“unnecessary, redundant rules that
would cripple the hotel industry.”
‘Protect NYC Tourism Coalition’
marches against hotel bill
Industry associations say the legislation will harm New York’s hotel
and tourism industry
More than a thousand hotel owners, workers, and small business owners
from the "Protect NYC Tourism Coalition" rallied at New York's City Hall on
September 12 to protest the City Council's "Safe Hotels" bill. Pictured, AAHOA
Treasurer Rahul Patel, left, speaks to coalition members.
www.asianhospitality.com
September 2024 | Issue 229
News
06
AHOA is joining Blackstone
Growth LP and afÏliated funds
in the association’s first strategic
investment, signing a definitive
agreement to acquire a majority stake in
M3 LLC, a hospitality accounting software
firm. The association claims the deal will
significantly benefit its members and the
entire hospitality industry.
However, the terms of the deal were
not disclosed.
“AAHOA is excited to make its
first strategic investment alongside
Blackstone, a move that will
significantly benefit our members
and the entire hospitality industry,”
said Miraj Patel, AAHOA’s chairman.
“This partnership with M3 will bring
AAHOA members access to advanced
technology and innovative solutions
that can enhance operational efficiency
and drive growth. We are committed
to empowering our members with
the tools and resources needed to
succeed in an evolving market, and
this collaboration marks a pivotal step
toward achieving that goal.”
The investment will accelerate the
company’s growth by enhancing product
expansion and supporting the adoption
of M3’s software, which helps hotel
operators run more efÏciently, the
companies said in a joint statement.
“Blackstone’s background in hospitality
made them the natural choice as our first
equity partner,” said John McKibbon, M3’s
founder. “Together, we look forward to
propelling our innovation and growth
to best serve our customers in an era of
continued technological advancement.”
McKibbon founded M3 in 1998 to
address the accounting needs of his
family's hotel management company,
the statement said. It serves as the
system-of-record for financial data for
more than 1,000 hotel operators and
management companies. Currently, it
provides accounting, labor management
and business intelligence products to
more than 8,000 properties across North
America.
“M3 has become a leading finance
and accounting software platform
for countless independent and
family-owned hotel operators, as
well as some of the largest hotel
management companies, that have
relied on its technology to support the
professionalization and scale of their
businesses,” said Ramzi Ramsey, a
managing director at Blackstone. “As
M3’s first institutional capital partner,
we’re excited to harness Blackstone’s
deep expertise and network within the
real estate and technology sectors to
help enhance its product offering to
better serve new and existing companies
as M3 continues to grow.”
Blackstone Growth, a private equity
growth fund managed by Blackstone, was
founded in 2020.
Carlton Fields P.A. served as legal
counsel to M3, while Houlihan Lokey
provided certain assistance to M3 in
connection with the transaction, the
statement said. Evercore acted as the
exclusive financial advisor to Blackstone,
and Kirkland & Ellis LLP served as legal
counsel to Blackstone.
Blackstone, AAHOA buy
majority stake in M3
The deal is AAHOA’s first large strategic investment and the association expects
to give members greater access to technology
In its first strategic investment, AAHOA, along with Blackstone Growth LP and afÏliated funds,
recently signed a definitive agreement to acquire a majority stake in hospitality accounting software
firm M3 LLC. AAHOA Chairman Miraj Patel said the investment will greatly benefit its members
and the hospitality industry.
www.asianhospitality.com
September 2024 | Issue 229
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07
News
— by J.D. Power
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News
08
www.asianhospitality.com
September 2024 | Issue 229
nterContinental Hotels Group
reported a 3 percent increase in global
RevPAR in the first half of 2024, with
3.2 percent growth in the second quarter,
driven by a recovery in U.S. markets. ADR
rose 2 percent, and occupancy increased
by 0.6 percentage points in the first half,
leading to a 6 percent rise in total gross
revenue, reaching $16.1 billion.
The company's U.S. RevPAR was
positive starting in April, increasing by 2.5
percent in the second quarter, IHG said in
a statement. In May, IHG reported a 0.3
percent year-over-year decline in RevPAR
for the Americas in the first quarter, due
to a 1.9 percent drop in U.S. RevPAR.
“We are making great progress on the
delivery of our strategic priorities and
the clear framework to drive future value
creation that we set out in February,”
said Elie Maalouf, IHG’s CEO. “RevPAR
growth accelerated in the latest quarter,
reflecting a strong U.S rebound in the
second quarter and the breadth of our
global footprint, and development activity
continues to increase. Together with
system growth, notable margin expansion
and the benefit of returning surplus
capital through buybacks, adjusted EPS
growth was up 12 percent.”
Global growth
The Berkshire, England-based IHG
expanded its global footprint with a 4.9
percent increase in gross system growth
year-over-year and a 3.2 percent rise in
net system growth. The company opened
18,000 rooms across 126 hotels in the first
half of the year, bringing its global estate
to 955,000 rooms in 6,430 hotels. During
the same period, IHG signed 384 hotels
comprising 57,100 rooms, representing
a 67 percent increase from the previous
year, or a 15 percent rise when adjusting
for acquisitions like Iberostar and
NOVUM.
“We celebrated 126 hotel openings
in the half and the signing of a record-
breaking 384 properties, equivalent to
more than two a day,” said Maalouf.
“These included the first six openings and
118 signings from the NOVUM Hospitality
agreement, which doubles our presence
in the important and attractive German
market. After growth of more than 7
percent in the first quarter, a very busy
second quarter saw 23 percent more
signings year on year or a more than
doubling when including NOVUM, and
this keeps us on track for net system size
growth expectations.”
Robust financials
IHG's revenue in the first half of the year
rose 4.3 percent to $2.32 billion from
$2.23 billion a year earlier. However,
pretax profit fell 17 percent to $472 million
from $567 million, the statement said.
The company’s operating profit from
reportable segments rose by 12 percent
to $535 million, though this includes a $10
million adverse currency impact.
The reported operating profit of $525
million reflects a planned reduction in
the prior System Fund surplus and no
exceptional items, compared to an $87
million profit in 2023, IHG said. Adjusted
EPS increased by 12 percent to 203.9¢,
despite higher adjusted interest expenses
and a 5.6 percent reduction in the weighted
average number of ordinary shares.
IHG revenue rises amid
U.S. market recovery
The company's U.S. RevPAR turned positive from April, increasing 2.5 percent in Q2
InterContinental Hotels Group, parent company of Holiday Inn brands, reported a 3 percent increase
in global RevPAR in the first half of 2024, with 3.2 percent growth in the second quarter, driven by a
recovery in U.S. markets.
09
News
September 2024 | Issue 229
personalized
support and training
“ My Assurance & Marketing Program
director truly cares about me and
my hotel. I’ve never experienced this
before from a hotel franchise.”
This is not an ofering. Federal laws and regulations and the laws and regulations of some states and provinces regulate the ofer and sale of franchises. An ofering
will only be made in compliance with those laws and regulations, which may require that we provide you with a disclosure statement. © 2024 Hospitality International
800-892-8405 • hifranchise.com • [email protected]
delivers
Ravi Master
Owner, Scottish Inns
Locust Grove, GA
Family member since 2016
ilton Worldwide Holdings reported net income of $422
million for the second quarter ending June 30, up from $413
million last year. The development pipeline grew 15 percent
year-over-year to 3,870 hotels with 508,300 rooms, an 8
percent increase from the previous quarter. Systemwide
RevPAR rose 3.5 percent year-over-year due to higher
occupancy and ADR.
"We are pleased to report a solid second quarter, with an
increase in RevPAR of 3.5 percent, driven by growth in all
segments, with particularly strong group performance,”
said Christopher Nassetta, Hilton’s president and CEO. “On
the development side, we ended the quarter with a record
development pipeline, up 15 percent from the prior year and
up 8 percent sequentially from the first quarter, including
strategic partner hotels. Looking forward to the rest of the
year, with the continued growth of our existing brands, as
well as the addition of our new brands and strategic partner
hotels, we expect net unit growth of 7 percent to 7.5 percent
for the full year."
Adjusted EBITDA for the three months ended June
30 was $917 million, up from $811 million in 2023, Hilton
said. Management and franchise fee revenues increased
by 10 percent year-over-year. In the US, second-quarter
occupancy rose by 1.1 percentage points to 76.8 percent, ADR
increased by 1.4 percent to $172.36, and RevPAR climbed 2.9
percent to $132.33.
Hilton opened 165 hotels with 22,400 rooms in the second
quarter, adding 18,000 net rooms for 6.2 percent net unit
growth. The company expanded its lifestyle portfolio by
acquiring the Graduate brand, adding 32 hotels and four
more in the pipeline. In July, Hilton partnered with Small
Luxury Hotels of the World, adding 400 SLH hotels to its
system. The NoMad London, the first NoMad hotel, also
joined Hilton’s portfolio, and 27 Spark hotels opened, more
than doubling the brand’s supply.
Hilton added 62,700 rooms to its development pipeline
during the second quarter. As of June 30, the pipeline
included 3,870 hotels with 508,300 rooms, up 15 percent
year-over-year and 8 percent from the prior quarter. These
hotels are in 136 countries and territories, including 39 with
no previous Hilton presence, with 251,800 rooms under
construction and 298,800 rooms outside the US. Hilton’s
global hotel count surpassed 8,000 in July.
For 2024, Hilton projects a 2 percent to 3 percent increase
in systemwide comparable RevPAR (currency-neutral)
compared to 2023. Net income is expected between $1.53
billion and $1.55 billion, with adjusted EBITDA projected
at $3.37 billion to $3.40 billion. Contract acquisition costs
and capital expenditures, excluding reimbursements, are
estimated at $250 million to $300 million.
Hilton forecasted a 2 percent to 3 percent increase in
systemwide comparable RevPAR (currency-neutral) during
the third quarter. Net income is projected to be between $435 million
and $448 million, with adjusted EBITDA ranging from $875 million to
$890 million.
Hilton’s net income, RevPAR and
pipeline rise in Q2
Second-quarter occupancy in the U.S. rose to 76.8 percent, ADR to $172.36, and
RevPAR to $132.33
News
10
www.asianhospitality.com
September 2024 | Issue 229
BRE Hotels recently reduced
its U.S. hotel forecast as
lodging demand dips amid soft
leisure travel and slower corporate
profit growth. The upcoming election
in November and other economic
factors also led to the revisions.
The research group now projects
a 1.2 percent RevPAR increase for
2024, down from 2 percent in May.
However, it expects a 2 percent
RevPAR growth in the second half of
2024, up from 0.5 percent in the first
half, driven by international tourism
and election events.
Lodging industry performance
is closely linked to economic
strength, with GDP growth generally
correlating with RevPAR growth,
CBRE said in a statement. The
company forecasts 2.3 percent GDP
growth and 3.2 percent average inflation
for 2024.
“We expect low single-digit RevPAR
growth over the near-term as election-
related events, growth in inbound
international travel and an anticipated
lower interest rate environment
should support hotel demand,” said
Rachael Rothman, CBRE’s head of hotel
research and data analytics. “Challenges
including weakening consumer
spending and increased competition
from short-term rentals, cruise lines
and other lodging alternatives pose
downside risks.”
CBRE remains optimistic that RevPAR
will reach a record $100.54 this year, 114.5
percent of 2019 pre-pandemic levels, the
statement said. This forecast is based on
a 1.1 percent ADR growth and a 10-basis
point increase in occupancy.
“Following stronger-than-expected
GDP growth in the second quarter,
CBRE anticipates a slowdown in
economic growth in the second half
of 2024 and into 2025,” said Michael
Nhu, CBRE’s senior economist and
head of global hotels forecasting. “If
interest rate cuts do not stimulate
growth and the economy continues
to weaken, we may see a decline in
RevPAR.”
According to CBRE, despite
potential challenges, travel demand
remains strong, with record year-
to-date TSA throughput in the U.S.
at nearly 549 million passengers, up
5.4 percent year-over-year.
The research firm expects
rising global wealth and limited
supply growth to support lodging
fundamentals long-term, forecasting
compound annual supply growth of under
1 percent over the next three years due to
high financing and construction costs.
In May, CBRE forecasted 2 percent
RevPAR growth for U.S. hotels in the
second half of 2024, down from 3 percent
estimated in February. The company
expected stronger growth in the latter
half of the year, driven by international
tourists, holiday travel and limited
supply growth.
CBRE cuts RevPAR growth forecast
to 1.2 percent for 2024
The research group remains optimistic that RevPAR will hit a record $100.54 this year
CBRE Hotels recently reduced its U.S. hotel forecast, projecting
a 1.2 percent RevPAR increase for 2024, down from 2 percent
estimated in May. It expects 2 percent RevPAR growth in the
second half of 2024, up from 0.5 percent in the first half, driven by
international tourism and election events.
TR and Tourism Economics updated
their 2024-25 U.S. hotel forecast, raising
projected occupancy by 0.2 percentage
points and revising the previous forecast of a
year-over-year decline. However, ADR gains
were downgraded by 0.1 percentage points, while
RevPAR remained unchanged at a 2 percent year-
over-year increase.
The occupancy growth projection for 2025 was
also lifted by 0.2 percentage points, while ADR
and RevPAR increases remained at 2 percent and
2.6 percent, respectively, STR and TE said in a
joint statement.
“Midscale and economy hotels are continuing
to feel the effect of fewer lower-income
travelers,” said Amanda Hite, STR’s president.
“On the other hand, high-income households
continue to travel, but domestic levels are
constrained due to an increase in outbound
travel. The stronger dollar continues to pressure
international inbound demand, especially as the
cost-of-living crisis continues in Europe and
airlift rebuilds across Asia Pacific.”
In June, STR and TE significantly downgraded
the 2024-25 U.S. hotel forecast, reflecting lower-
than-expected performance and reduced growth
projections for the year.
“Economic growth is expected to be slower
next year, but with strong household balance
sheets, a gradual upswing expected in business
investment, and moderating inflation, we
anticipate a favorable context for moderate travel
growth, said Aran Ryan, TE’s director of industry
studies.
“Further gains in international inbound
travel, as well as in business and group travel, are
also expected to help support lodging demand
growth next year.”
Hite said annual GOP and EBITDA margins
are forecasted to improve slightly year over
year.
“For 2025, higher growth is expected across
both metrics due to lower labor costs, which are
set to decrease slightly for a majority of the chain
scales,” she said. “Upper midscale chains are still
expected to maintain the lowest labor costs this
year, with 2025 levels forecasted to come in $168
lower than Luxury chains.”
STR, TE project positive growth for U.S. hotels in 2024-25
The 2025 occupancy growth projection was increased by 0.2 percentage points