NATIONAL REPORT — Dallas-based CBRE forecasts RevPAR to continue to grow steadily in 2024, driven by
improving group business, the further return of traditional transient business
demand and increasing inbound international travel.
CBRE is forecasting a 3% increase in RevPAR overall in 2024,
a 2.5% increase in ADR and for occupancy to increase by 45 basis points. This
continued growth has CBRE’s projected RevPAR ending 2024 13.2% higher than
2019. The company’s baseline forecast expects GDP growth of 1.6% and average
inflation of 2.5% during the year. CBRE said that given the typically strong
correlation between GDP and RevPAR growth, it expects the economy’s strength
will directly impact the performance of the hospitality industry.
“We expect RevPAR
growth to be slower in the first quarter due to last year’s strong performance,
but to reach its peak in the third quarter driven by the influx of inbound
international travelers during the busy summer season,” said Rachael Rothman, CBRE’s
head of hotel research and data analytics. “Urban and airport locations
should particularly benefit from group and inbound international travel, as
well as the normalization of leisure travel.”
CBRE’s U.S. lodging report analyzes 65 major markets, the
six hotel chain scales and six location types.
The report said for the full year of 2023, the U.S. economy
had GDP growth of 2.5%, resulting in a record RevPAR of $95.84, a 3.2% increase
year-over-year. That RevPAR growth was driven by a 2.7% increase in ADR and a
0.31 percentage point increase in occupancy.
CBRE also said the growth was driven by group business,
international inbound and an uptick in traditional transient business demand.
“Despite the upside surprises in employment and GDP growth
in 2023, lodging demand fell short of initial expectations due to the
popularity of lodging alternatives like cruises and short-term rentals,” said
Michael Nhu, senior economist and CBRE’s head of global hotels forecasting.
CBRE still expects muted supply growth, at least in
the medium term, because of elevated financing and construction costs and the
limited availability of properties that can be purchased below replacement
costs. It expects supply growth of just under 1%, with hotel supply projected
to maintain a compound annual growth rate of 0.87% over the next three years.