Hotel Sector to Have Better Year Than Initially Forecast, CBRE Reveals
Originally published on May 30, 2023, by Anneliese Mahoney for Mortgage Banker's Association.
CBRE, Dallas, raised its hotel performance outlook for this year once again, improving its forecast for revenue per available room to $97.89, up 6% year-over-year, and an increase of 43 cents from its previous forecast.
“We are already starting to see signs that the easing of travel restrictions in Japan and China, combined with continued improvements in group and independent business demand, are bolstering demand heading into the heavy summer travel season,” said Rachael Rothman, CBRE’s Head of Hotel Research and Data Analytics.
The May 24 revision is predicated on a 65-basis-point increase in expected occupancy compared with the previous forecast issued in February, CBRE said in a release. The average daily rate is expected to increase by 3.7% in 2023, down from the previous forecast of 4.2%; CBRE attributed that shift to slightly lower inflation expectations, among other factors.
For this projection, CBRE’s baseline-scenario forecast anticipates 0.8% average GDP growth and average inflation of 4.6% in 2023. CBRE noted a strong correlation between gross domestic product and RevPAR growth.