Los Angeles – June 14, 2018 – Based on better than expected first-quarter performance, CBRE Hotels’ Americas Research (CBRE) has enhanced its outlook for 2018. According to STR, U.S. hotels enjoyed a 3.5 percent increase in revenue per available room (RevPAR) during the first quarter of 2018, exceeding the 2.5 percent RevPAR gain expected by CBRE for the period. Accordingly, CBRE now is forecasting a 2.8 percent annual increase in RevPAR for U.S. hotels in 2018, a 0.3 percentage point enhancement over the 2.5 percent mark published in CBRE’s March 2018 Hotel Horizons® report.
Average daily rates (ADR) at Los Angeles area hotels have and will continue to rise year-over- year, which is consist with national averages. Los Angeles’ ADR for this year is expected to climb 3.1% from last year to $181.41 and is expected to increase an additional 2.6% to $186.19 in 2019.
“The health of the Los Angeles hotels’ market can be attributed to several factors—international visitation, leisure and business travel and the impact of a strong economy and record low unemployment,” said Bruce Baltin, managing director of CBRE Hotels’ Consulting. “We have witnessed solid growth the last few years and expect that to continue for several years to come.”
Revenue per available room, an industry measure of occupancy and rate, is expected to climb 2.9% to $144.86 in the Greater Los Angeles area this year, and is forecast to rise an additional 2.5% to $148.55 next year, according to CBRE research.
Added R. Mark Woodworth, senior managing director of CBRE Hotels’ Americas Research, “We continue to be impressed by the ability of the U.S. economy to support demand growth for accommodations away from home. Helped by an expanding economy, first quarter 2018 lodging demand grew at 3.0 percent, a full 1.1 percentage points greater than anticipated.
This sustains 33 consecutive quarters of demand growth, a streak that started in the first quarter of 2010.”