CBRE Forecasts Continued Hotel Recovery in 2022 Despite Increasing Risks

 

Rachael Rothman

Dallas. TX – CBRE Hotels Research has raised its forecast for 2022 average daily rate (ADR), Occupancy and Revenue per available room (RevPAR) to reflect the stronger-than-expected fundamental performance in the fourth quarter.

Other factors contributing to the improvement include below-average supply growth, strong domestic leisure trends, the resumption of inbound international travel and a predicted return to office later this year.

 CBRE made the changes despite heightened uncertainty and increasingly limited visibility due to geopolitical risks and inflationary pressure.

 “Higher room rates will lead to a quicker return to 2019’s nominal ADR levels,” said Rachael Rothman, CBRE’s Head of Hotel Research & Data Analytics. “But from a profitability perspective, inflation will be a headwind through higher utilities, supplies and labor.”

Bram Gallagher

The effects of inflation on ADR won’t be uniform. Bram Gallagher, CBRE Senior Hotel Economist said, “Historically, most hotels can respond to inflation with price increases, but only luxury hotels have demonstrated that they can exceed the pace of inflation to achieve real gains. Economy hotels have the most difficulty raising prices enough to keep up.”

 CBRE now forecasts RevPAR to reach 2019 nominal levels by Q3 2022 under CBRE’s base case scenario, rather than in Q3 2023, as previously forecasted.

The March 2022 edition of Hotel Horizons for the U.S. lodging industry,65 major markets, the six hotel chain scales and six location types can be purchased by visiting: https://pip.cbrehotels.com.

 

 

Contacts:

Kris Hudson

+ 1 214 863 3650

kris.hudson@cbre.com

 

Chris Daly

President

DG Public Relations

(703) 864-5553

chris@dalygray.com

www.dalygray.com

www.cbre.com.