CBRE Hotels expects RevPAR growth recovery following Summer slowdown

DALLAS – CBRE is forecasting revenue per available room (RevPAR) growth to recover in 2024 as inbound international travel further improves and sector-specific headwinds moderate.

CBRE’s forecasts 3.0% RevPAR growth in 2024, driven by a 40 basis-point (bps) occupancy improvement and a 2.3% average daily rate (ADR) increase. RevPAR in 2024 is expected to be 14% greater than 2019 levels.

CBRE’s baseline forecast anticipates 0.8% average GDP growth and 2.9% average inflation in 2024. Given the strong correlation between GDP and RevPAR growth, stronger or weaker economic growth will directly impact lodging industry performance.

“U.S. hotel operators faced stiff headwinds to demand and pricing power over the summer due to the number of Americans who elected to vacation overseas, go on cruises or stay in short-term rentals or other alternative forms of lodging,” said Rachael Rothman, CBRE’s Head of Hotel Research & Data Analytics. “We expect RevPAR trends to improve modestly as we head into 2024, as these headwinds ease and the number of inbound international travelers further recovers.”

In Q3 2023, demand declined for the second quarter in a row as ADR growth was the slowest since the post-pandemic recovery began in the first half of 2021. Softer-than-expected demand and more modest pricing power resulted in RevPAR declining 0.3% nationally, the first quarterly decline during the post-pandemic recovery cycle.

“It is uncommon for US hotel performance to weaken when economic growth is resilient and consumers are spending at record levels; however, we are optimistic that the eventual return of more than 4.7 inbound international travelers will boost occupancy and pricing power back toward their historical trend lines,” said Michael Nhu, Senior Economist and CBRE’s Head of Global Hotels Forecasting.

The article CBRE Hotels expects RevPAR growth recovery following Summer slowdown first appeared in TravelDailyNews International.