STR, TE LOWER U.S. HOTEL FORECAST FOR 2024-25

STR AND TOURISM Economics made significant downward adjustments to the 2024-25 U.S. hotel forecast, reflecting lower-than-expected performance and reduced
growth projections for the remainder of the year. Projected gains in ADR and RevPAR were downgraded by 1 and 2.1 percentage points, respectively. Occupancy is
also expected to decline, contrasting with the previous forecast’s projection of year-over-year growth in this metric.

While an occupancy growth projection was maintained for 2025, ADR and RevPAR were adjusted downward by 0.8 and 0.9 percentage points, respectively, STR and TE said
in a joint statement.

“We have seen a bifurcation in hotel performance over the first four months of the year, which we don’t believe will abate soon,” said Amanda Hite, STR’s president.
“The increased cost of living is affecting lower-to-middle income households and their ability to travel, thus lessening demand for hotels in the lower price tier.
The upscale through luxury tier is seeing healthy demand, but pricing power has waned given changes in mix and travel patterns and to a lesser extent, economic
conditions. Travel remains a priority for most Americans, but the volume has lessened as prices on goods and services continue to rise.”