CBRE cuts 2024 hotel forecast, but sees recovery ahead
CBRE Hotels Research has again lowered its 2024 growth forecasts for U.S. ADR, occupancy and RevPAR
CBRE has revised its full-year 2024 U.S. hotel performance forecast. The firm now expects RevPAR (revenue per available room) to increase 0.5% year-over-year, down from the 1.2% increase forecast in August. U.S. occupancy is expected to decline 0.3% year-over-year, a reversal from the 0.3% increase previously forecast. Meanwhile, average daily rate (ADR) growth is now forecast at 0.7%, compared to the previous forecast of a 1.1% increase.
Key takeaways
- Third quarter performance: According to Rachael Rothman, CBRE's director of hotel research and data analytics, U.S. hotel performance fell short of expectations in the third quarter due to weaker leisure demand. However, she noted that gains in group and business travel provided some positive momentum;
- Economic ties: CBRE emphasizes that the U.S. hotel industry is closely tied to broader economic indicators. Projections of strong GDP growth through 2025, along with moderating inflation and limited new hotel supply, are expected to drive improvements in ADR and RevPAR;
- Future outlook: Michael Nhu, CBRE's head of global hotel forecasting, observed a continued decoupling between hotel demand and GDP growth in the third quarter. He expects this relationship to normalize as interest rate cuts, lower CPI growth and improving GDP metrics take effect. These trends are expected to strengthen the fundamentals of the U.S. hotel market and accelerate RevPAR growth into 2025.
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