Exhausted household savings and an upcoming recession is set to hit hotel demand over the next year or so. However, as happened in the aftermath of the GFC, some stretched households may decide to take a domestic holiday instead of a foreign one. We doubt the rise in domestic breaks with an overnight stay will be as large today and hotel rents are still set to fall this year. But they should outperform the wider leisure sector over the next few years with growth of 0.8% p.a. from 2023-27.
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