The latest edition of CBRE U.S. Hotels State of the Union highlights key industry indicators and outlook for the U.S. Hotel industry
Key Takeaways
Economy
- CBRE slightly raises GDP and employment forecasts. 2023 GDP forecast increased to 0.2% from -0.2%, with employment increasing to 0.5% from 0.2%.
- CBRE expects interest rates to peak at 4.9%. CBRE expects interest rates to continue to rise, peaking at 4.9% in 2023, up from 4.3%, currently.
- CBRE expects inflation to moderate in 2023. CBRE expects inflation to moderate to 4.7% in 2023, down from 6.7% in December.
Current Trends
- RevPAR growth slowed in December, year-over-year. Most chain scale types experienced slower growth in December but remained well above 2019 levels.
- TSA throughput hit post-pandemic highs versus 2019. TSA throughput exceeded 2019 levels in January. Year-over-year growth is likely to slow in March due to post-
Omicron comparisons. - Brand.com has taken share relative to OTAs vs. 2019 For the first time post-pandemic, Group share of demand reached 100% of 2019 levels.
Food for Thought
- GOP margins remained under pressure in November. Despite strong RevPAR growth, GOP margins have declined for the sixth straight month due to the reopening of
amenities and the impact of inflation. - Post-pandemic credit spreads have widened 135 bps. Despite interest rates increasing, credit spreads peaked in August 2021.
- International travel continues to drive growth. The re-opening of Japan and China is likely to fuel growth in 2023, particularly in West Coast, destination, and gateway markets.
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