NEW YORK (Reuters): -Lower-income Americans dialled back their travel spending in April as reduced savings, higher credit card delinquencies, and inflation weighed on household budgets, according to data from commercial real estate analytics firm CoStar.

While wealthier Americans continued to travel, lower-income travellers booked fewer hotel stays in the United States. Costar adjusted its full-year forecast to account for slowing GDP and reduced demand from frugally-minded travellers.

Overall U.S. hotel room demand in April fell 0.5 per cent due to declining demand for midscale and economy hotels, CoStar said in a presentation at the NYU International Hospitality Industry Investment Conference on Monday.

“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,” Amanda Hite, STR president, said in a statement.

U.S. room demand in April fell about 2.7 per cent and 3.9 per cent for mid-scale and economy hotels, respectively. Revenue per available room, an important industry metric, fell about 1.7 per cent and 3 per cent, respectively.

U.S. debt levels rose by $184 billion, or 1.1 per cent, in the first quarter to $17.69 trillion, according to the Federal Reserve Bank of New York. Overall borrowing levels are $3.5 trillion above where they were at the end of 2019.

CoStar downgraded its previous 2024 forecasts for the industry, now expecting average daily room rates will rise 2.1 per cent this year compared to its previous forecast of 3.1 per cent. In 2023, room rates rose 4.3 per cent.

Revenue per available room is expected to rise 2 per cent in 2024, compared to previous forecasts of 4.1 per cent and after a 5 per cent increase in 2023.

Occupancy levels are expected to fall year-over-year to 62.8 per cent from 63 per cent in 2023, compared to previous forecasts for a slight increase. Supply is expected to grow 0.8 per cent this year, compared to 0.3 per cent growth in 2023.