Research and Analytics Update
|
Preliminary figures for July indicate a slight increase of 400 jobs, bringing the total to 100,500 leisure and hospitality jobs across the Island. The local unemployment rate is 5.8%, which is 0.2 points lower than the same time last year. This growth in leisure and hospitality jobs underscores the sector’s significant contribution to the local economy and its role in reducing unemployment.
|
|
|
According to the latest "State of the American Traveler" report by Future Partners, travelers are feeling more optimistic about their financial future than they have in the past two years. Younger travelers, in particular, are more confident about their future financial position compared to other generations. Concerns about an economic recession are also at their lowest since the post-COVID era, with only 38% of travelers expecting a recession in the next six months, a significant drop from the previous high of 65%.
According to recent data, 33% of households now believe it's a good time to spend on travel, up from 28.9% last year. The Conference Board’s Consumer Confidence survey also revealed that more American consumers in June reported plans to take a vacation within the next six months compared to the same time last year.
Overall, excitement for leisure travel remains high, with 86% of travelers expressing enthusiasm for traveling in the next 12 months and an average expected trip budget of $4,553.
|
|
|
While recession fears among travelers have decreased, stagnant inflation and high interest rates are influencing how people pay for trips. According to the “State of the American Traveler,” 40% of American travelers financed at least part of their trip, with 4 in 10 paying off at least 75% of their expenses within three months.
“Buy now, pay later” services, such as those offered by Uplift and Affirm, have become popular, particularly among younger and lower-income travelers. These services provide flexible payment options, making travel more accessible and affordable. However, they require careful management, as overspending, high interest rates, and fees can outweigh their benefits.
Spending plans also vary by generation. Millennials and younger travelers plan to spend about $3,500 on leisure travel over the next 12 months, compared to $4,400 by Generation X and $5,300 by Boomers. Due to their lower budgets, younger travelers, especially Gen Z and those from less affluent backgrounds (household income under $100K), are more likely to borrow money to finance their travels compared to older or more affluent travelers.
|
|
|
Puerto Rico’s lodging demand has increased by 7% year-to-date through July, with a significant portion of this growth driven by a strong rental market. Despite a 3.9% increase in hotel supply nights compared to last year, the total number of hotel supply nights now equals the number of rental listing nights available to visitors.
Year-to-date hotel performance through July, as reported by STR, reveals mixed results. While average daily rates have risen by 2%, overall hotel occupancy has dropped by 1.6%, and revenue per available room (RevPAR) has seen a modest increase of 0.5%. Across different regions and hotel categories, performance has varied:
● Luxury and Upper Upscale properties: These properties, primarily resorts and large city hotels, have experienced lower occupancy rates but have managed to increase RevPAR.
● Upscale and Mid-class hotels outside San Juan: These smaller, often non-beachfront hotels have performed well, with occupancy up by 5.8% and rates increasing by 4.5% compared to last year.
● San Juan Upscale and Mid-class hotels: This segment faces challenges, competing with over 5,000 rental listings and new small hotels entering the market, leading to reductions in both occupancy and RevPAR.
Nationally, the U.S. hotel lodging demand has remained flat this year. The greatest challenges are seen in lower-end economy properties, where occupancy rates have been declining. In contrast, luxury hotels are experiencing higher demand, highlighting a growing divide between lower- and higher-income consumers, as noted by Jan Freitag, the national director of hospitality analytics at CoStar.
|
|
|
500 Calle De La Tanca
Building Ochoa, Suite 402B
San Juan, PR 00901, USA
|
|
|
|
