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Last week, economist Aran Ryan joined the HSMAI Revenue and Ownership Executive Roundtable discussions to offer insights on the state of the economy, travel, and current risks.
Economy
Despite prevailing fears, the economic outlook isn’t as dire as some might believe. The economy is indeed decelerating this year and is expected to continue on this path into the next year. However, this slowdown is not alarming. A resilient labor market and cooling inflation are key factors supporting consumer spending, even as many lower-income households might feel the pinch.
Travel
In the travel sector, lower-tier hotels are experiencing a softening in demand. Nonetheless, leisure travel continues to benefit from a favorable tailwind as consumer budgets show capacity. Business travel is on a positive trajectory, with group travel trends rebuilding steadily. Notably, international inbound travel is experiencing strong gains.
Risks
The global economic landscape is not without its risks. Significant geopolitical tensions, including those in the Middle East, Taiwan, and the ongoing Russia-NATO dynamics, pose considerable uncertainties. The baseline economic outlook carries a 45% probability, suggesting a balanced perspective between potential upsides and downsides. Alternatives to this baseline scenario include both stronger outcomes, such as a scenario where inflation is fully controlled, and weaker outcomes, like prolonged high interest rates or escalations in the Middle East conflict.
HSMAI hosts this unique by-invitation only forum annually for hospitality executives. If you are interested in being invited next year, please email Bob Gilbert.