Bram Gallagher | October 24, 2018
By Bram Gallagher The present hotel cycle is defying conventional expectations of late-cycle Revenue Per Available Room (RevPAR) behavior. Over the previous two cycles, recovery began primarily with occupancy. As the cycles continued, average daily rate (ADR) began to rise. Eventually, the increases to ADR were the dominant contributor to RevPAR growth, and occupancy leveled off or even slightly declined. These cycles, occurring from August 1992 to November 2002 and November 2002 to May 2010, lasted approximately ten and eight years, respectively. Well into the ninth year of its current cycle, we would expect that the hotel market would...
Robert Mandelbaum | April 24, 2018
By Robert Mandelbaum and Bram Gallagher Ph.D. Since 2014, U.S. lodging industry owners and operators have seen a steady decline in the pace of revenue growth. In 2014, rooms revenue per available room (RevPAR) increased by a healthy 8.2 percent according to STR. Per the December 2017 edition of CBRE's Hotel Horizons®, RevPAR is forecast to increase by just 2.5 percent in 2018. Facing lackluster revenue growth, hotelier's sights are now focused further on down the operating statement to determine what the impact of slow top-line gains will be on bottom-line profits. To provide U.S. hotel owners and operators with a sense of expected ...
Bram Gallagher | January 28, 2016
By Bram Gallagher, Economist at PKF Hospitality Research, a CBRE Company Conventional hotel market predictions are based on time series analysis of key variables, and these kinds of predictions have well-understood properties when businesses operate as usual. Exogenous demand shocks—shocks originating beyond the scope of any particular hotel market—have the potential to create unpredictable disturbances, in part by creating emotional or psychological barriers to travel that we call stigma or fear of travel. Previous research by PKF Hospitality Research, a CBRE company, into exogenous demand shocks examined fear of travel bro...
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