Even as consumer spending softens and household savings run dry, the U.S. hotel sector is holding its ground, with revenue growth largely stabilizing across markets. According to a new report from Moody's Reis, although the industry has bounced back from its pandemic slump, the recovery is far from uniform. Some regions are booming, while others—particularly in the West—continue to lag and face a longer road to recovery.

Cumulative household savings peaked in August 2021 at $1.2 trillion before declining continuously and reached -$490 billion by July. Revenue per available room (RevPAR) briefly returned to its pre-pandemic levels around Augst 2021 and dipped back below pandemic levels for the rest of the year.  And although revenues did bounce back in March 2022, the sector did not sustain its recovery until January 2023, Moody's said. Furthermore, the increase in hotel revenues has been driven more by higher room rates than increased occupancy.

"There has been an uneven recovery across markets since the pandemic," said Nick Villa, an economist at Moody's. "Among the 69 hotel metros tracked by Moody's CRE, the top 10 metros saw RevPAR cumulatively increase by 42.8% from December 2019 to August 2024, which translates into a compound annual growth rate (CAGR) of 7.8%. Meanwhile, the bottom 10 metros saw RevPAR cumulatively decline by 9.6%, representing a CAGR of -2.3%."