CBRE is lowering its U.S. hotel performance forecast due to softening lodging demand from weaker leisure travel and slower corporate earnings growth
Aug 19, 2024
CBRE now forecasts revenue per available room (RevPAR) growth of 1.2 percent in 2024, down from 2.0 percent in May. However, CBRE expects RevPAR to grow 2 percent year-over-year in the second half of 2024, up from 0.5 percent in the first half, driven by international tourism and election-related events.
Key takeaways
- CBRE projects GDP growth of 2.3 percent and average inflation of 3.2 percent in 2024. The performance of the lodging industry is closely tied to the strength of the economy, with a strong correlation between GDP and RevPAR growth;
- CBRE remains optimistic that RevPAR will set a nominal record of $100.54 this year, reaching 114.5 percent of pre-pandemic levels in 2019. This is based on projected average daily rate growth of 1.1 percent and a 10 basis point increase in occupancy;
- Despite the challenges, travel demand remains strong, with the U.S. Transportation Security Administration reporting a record year-to-date throughput of nearly 549 million passengers, up 5.4 percent year-over-year.
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