Dallas – November 16th, 2023 – CBRE is forecasting revenue per available room (RevPAR) growth to recover in 2024 as inbound international travel further improves and sector-specific headwinds moderate.

CBRE’s forecasts 3.0% RevPAR growth in 2024, driven by a 40 basis-point (bps) occupancy improvement and a 2.3% average daily rate (ADR) increase. RevPAR in 2024 is expected to be 14% greater than 2019 levels.

CBRE’s baseline forecast anticipates 0.8% average GDP growth and 2.9% average inflation in 2024. Given the strong correlation between GDP and RevPAR growth, stronger or weaker economic growth will directly impact lodging industry performance.

“U.S. hotel operators faced stiff headwinds to demand and pricing power over the summer due to the number of Americans who elected to vacation overseas, go on cruises or stay in short-term rentals or other alternative forms of lodging,” said Rachael Rothman, CBRE’s Head of Hotel Research & Data Analytics. “We expect RevPAR trends to improve modestly as we head into 2024, as these headwinds ease and the number of inbound international travelers further recovers.”

In Q3 2023, demand declined for the second quarter in a row as ADR growth was the slowest since the post-pandemic recovery began in the first half of 2021. Softer-than-expected demand and more modest pricing power resulted in RevPAR declining 0.3% nationally, the first quarterly decline during the post-pandemic recovery cycle.

“It is uncommon for US hotel performance to weaken when economic growth is resilient and consumers are spending at record levels; however, we are optimistic that the eventual return of more than 4.7 inbound international travelers will boost occupancy and pricing power back toward their historical trend lines,” said Michael Nhu, Senior Economist and CBRE’s Head of Global Hotels Forecasting.

The best performing lodging location type in Q3 2023 was urban, where occupancy improved 110 bps to 70.3%. Airport occupancy was stable at 71.9%, while occupancy fell at suburban, town, resort and interstate properties. Occupancies at all location types were below 2019 levels in Q3 2023.

The November 2023 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/hotelhorizons. CBRE’s baseline forecasts do not contemplate an international war or a pervasive recession. CBRE also produces forecasts based on upside and downside scenarios.

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2022 revenue). The company has approximately 115,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.

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