2023 was a big year for the hotel industry. Has its recovery peaked?

InterContinental Hotels Group — which owns Holiday Inn, Crowne Plaza and others — reported on Tuesday that it had good earnings in 2023. The company made more money per room last year and increased its profits to over $1 billion for the first time.

2023 was a big recovery year for a lot of hotels, but is it possible that the post-lockdown travel and lodging boom has peaked?

The first couple years of the pandemic were brutal for hotels. But Steven Carvell at Cornell’s School of Hotel Administration says 2023 was an outstanding year.

“I don’t think people anticipated it back in 2022,” he said. “Everyone thought that we’d have a recession by now.”

That recession never materialized, and Carvell says the strong economy boosted hotels across the board.

“The board includes primary markets like New York City, Boston, Miami. Destination resorts, smaller cities, upscale and luxury hotels,” he said.

Hotels charged more and made more per room in 2023, though occupancy was still below pre-pandemic levels. One big reason is business travel is still lagging.

“I think overall, hotels follow the path of business travel in general,” said Suzanne Neufang at the Global Business Travel Association. According to Neufang, more and more companies are sending employees on work trips.

“Of those who buy travel for their companies, 66% expect that their company’s business travel spend will be higher this year,” she said.

So far, leisure travel has been the key to the hotel industry’s comeback. But Kaushik Vardharajan at Boston University’s School of Hospitality Administration says in 2023 we saw that taper off a bit.

“I think 2024, you’ll continue to see leisure travel moderate,” said Vardharajan.

Meaning we probably won’t see the same kinds of big increases we’ve seen the last couple years, at least when it comes to travel within the U.S.

But he says tourists from abroad are a different story.

“I do expect leisure demand from international destinations to increase significantly,” said Vardharajan.

Especially now that China has lifted its restrictions on foreign travel.