hotel horizons
As Occupancy Stalls, Parking Drives Hotel Revenue Growth
Todd Casper | July 6, 2023
By Robert Mandelbaum, Todd Casper Based on our February 2023 Hotel Horizons® report, CBRE is forecasting that total hotel revenue for the average U.S. hotel returned to pre-COVID levels in 2022. This occurred despite the fact that the average occupancy for U.S. hotels is not expected to exceed 2019 levels until 2026. With occupancy levels lagging during the post-COVID recovery and guest counts depressed, hotel owners and operators have had to look for alternative sources of revenue beyond the rental of guest rooms to make up for the income deficits. For some hotels in the U.S., parking has become a profitable source of revenue since CO...
CBRE Hotels Again Raises Outlook for 2023, Expects Strong Growth Through Summer
CBRE Group, Inc. | May 24, 2023
Dallas – May 24, 2023 – CBRE is again raising its forecast for hotel performance this year, as stronger-than-expected demand and more modest supply growth drive occupancy gains. CBRE has revised its forecast for 2023 revenue per available room (RevPAR) to $97.89, up 6.0% year-over-year, and an increase of $0.43 from its previous forecast. The positive revision is predicated on a 65-basis-point (bps) increase in expected occupancy compared with the previous forecast issued in February 2023. Average daily rate (ADR) is now expected to increase by 3.7% in 2023, down from the previous forecast of 4.2%, owing to slightly lower inflation exp...
The Lag in Food and Beverage Recovery
Robert Mandelbaum | December 12, 2022
By Robert Mandelbaum, Andrew Hartley According to CBRE’s September 2022 Hotel Horizons® forecast for the overall U.S. lodging industry, rooms revenue per-available-room (RevPAR) will exceed 2019 annual levels in 2022. This is driven by the accelerated recovery of average daily rate (ADR) which first occurred during the third quarter of 2021. Unfortunately for the owners and operators of full-service, convention, and resort hotels, food and beverage (F&B) revenue is lagging in recovery and yet to return to pre-COVID levels. This can be attributed to a combination of the following factors: Health regulations The lag in ...
Hotel Property Taxes – An Opportunity to Cut a Cost
Robert Mandelbaum | May 26, 2022
By Robert Mandelbaum and Mark Whitney According to the March 2022 edition of CBRE’s Hotel Horizons® national forecast report, the total revenue for a typical U.S. hotel is not expected to return to pre-COVID 2019 nominal dollars until 2023. Accordingly, hotel owners and operators continue to seek ways to control expenses. One potential reduction opportunity is property taxes. Based on a sample of 3,400 hotels from CBRE’s Trends® in the Hotel Industry database, U.S. hotel property tax expenditures declined by 13.0% from 2020 to 2021. This decline put 2021 property taxes 9.9% below 2019 levels. Unfortunately, this compares u...
U.S. Lodging Demand Forecast to Return to Pre-Pandemic Levels by Fourth Quarter 2023
CBRE Group, Inc. | July 20, 2021
Dallas, TX – July 20, 2021 – Based on stronger than expected performance during the first quarter of 2021, plus encouraging economic and vaccination news, CBRE Hotels Research forecasts U.S. lodging demand will return to pre-pandemic levels by the fourth quarter of 2023. The strength in lodging demand will support pricing, but occupancy gains will be somewhat offset by new supply, as fewer development and conversion projects were side-lined than previously forecasted. As a result, the recovery in occupancy will not occur until the fourth quarter of 2025 due to greater supply growth during the 2020 – 2022 period than coming out of pr...
Vaccinations and Economic Stimulus Spur Stronger Second Half Performance for U.S. Hotels
CBRE Group, Inc. | March 30, 2021
Dallas – March 30, 2021 – The continued rollout of COVID-19 vaccinations and additional stimulus funds have strengthened the foundation for the recovery of the U.S. lodging industry. According to the February 2021 edition of Hotel Horizons®, CBRE Hotels Research is forecasting an average national occupancy level of 43.0% during the first half of 2021, accelerating to 55.1% in the second half of the year. “Our current forecast takes into account a national rollout of the COVID vaccines, plus the December COVID Relief Bill, both of which support the projections of improved performance during the second half of the year,” said Rach...
US Hotel Industry Forecast Adjusts in Response to COVID-19 Winter Surge and Anticipation of Vaccines
CBRE Group, Inc. | December 14, 2020
Dallas – December 14, 2020 – The recent surge in COVID-19 infections has dampened expectations for U.S. hotel performance through the first half of 2021, but news of effective vaccines has bolstered projections of U.S. lodging industry recovery beginning in earnest during the second half of next year, according to CBRE’s latest hotel forecast. According to the recently released Q3 2020 edition of Hotel Horizons®, CBRE Hotels Research is forecasting an average national occupancy level of 44.4 percent during the first half of 2021. This measure increases to 55.7 percent during the year’s second half. “The increased spread of th...
The Owner’s Obligation – Cash
Robert Mandelbaum | August 17, 2020
By Robert Mandelbaum The COVID-19 virus has had an extreme negative impact on the U.S. lodging industry. According to CBRE’s June 2020 edition of Hotel Horizons®, lodging demand in the U.S. will decline by 37.0 percent in 2020. This will cause a 38.0 percent drop in the national occupancy level, along with a 22.5 percent fall in average daily room rates (ADR). The net result is a projected 51.9 percent fall off in revenue per available room (RevPAR) for the year. Using historical data from the CBRE Trends® in the Hotel Industry database of operating statements, the most likely consequence of a 51.9 percent RevPAR decline is a G...