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Poor Performers
Robert Mandelbaum | June 18, 2019
By Robert Mandelbaum According to the March 2019 edition of CBRE’s Hotel Horizons® forecast report, the 2019 average annual occupancy level for U.S. hotels is projected to be 66.2 percent. This will mark the sixth consecutive year of occupancy levels above the 62.5 percent long-run average, and fifth year above the pre-2014 historical high of 64.8 percent. Despite such healthy market conditions, not all hotels are enjoying lofty levels of performance. According to STR, 35.7 percent of the hotels in their U.S. national sample achieved an occupancy level less than 60 percent during 2018. If you have attended any hotel investment co...
Attrition and Cancellation Revenue
Robert Mandelbaum | May 20, 2019
By Robert Mandelbaum Per the Uniform System of Accounts for the Lodging Industry (USALI), the income received from transient and group guests that fail to occupy a room, or cancel a reservation in the prescribed timeframe, and for which payment was guaranteed on an individual basis, is recorded as No Show Revenue in the Rooms Department. This source of revenue is frequently difficult to identify as a discrete source of income on the standard hotel operating statement format. On the other hand, the fees hotels receive from the cancellation of group meetings are typically presented as a separate line item in Miscellaneous Income. Because ...
U.S. Hotels Enjoy Profit Growth, But It Is Becoming Harder to Achieve
CBRE | April 29, 2019
Atlanta – April 29, 2019 – While U.S. hoteliers enjoyed a ninth consecutive year of increasing profits in 2018, it is becoming increasingly difficult for managers to accomplish this task. According to the recently released 2019 edition of Trends® in the Hotel Industry by CBRE Hotels Americas Research, total operating revenue increased by 2.6 percent in 2018 for the average hotel in its survey sample. Managers were able to limit the growth in operating expenses to 2.8 percent, thus allowing for a 2.3 percent increase in gross operating profits (GOP) at the Trends® properties. The 2.8 percent growth in expenses is less...
Revenue Is Rising, But Collecting Is More Challenging
Robert Mandelbaum | April 18, 2019
By Robert Mandelbaum According to STR, U.S. hotels achieved all-time high levels of occupancy, ADR, and RevPAR in 2018. While a record number of guests are staying at hotels, and revenues are flowing in, the ability to collect these funds is starting to become more of a challenge. Per the Uniform System of Accounts for the Lodging Industry, an account entitled "Provision for Doubtful Accounts" has been established in the Administrative and General Department of a hotel operating statement. Each month, hotel managers estimate the portion of their property's receivables that they do not believe will be collectible. The Provision for Doubt...
Hotel Spas: Not Just for Resorts Anymore
the Authors | March 25, 2019
By Mark VanStekelenburg and Jenna Finkelstein According to the December 2018 edition of CBRE's Hotel Horizons®, the annual growth in RevPAR for U.S. hotels is forecast to decelerate from 2.8 percent in 2018 to 0.1 percent in 2021. As the main source of hotel revenue is plateauing, hoteliers are looking up and down their operating statements to find alternative sources of income. For hotels that operate a spa, this department has stood out as a bright spot not only for growth in revenue, but gains in profits as well. The slowdown in revenue growth will be particularly acute in the nation's major markets. Since 2010, the majority of n...
CBRE Research Forecasts Healthy RevPar Growth for U.S. Hotels in 2019 and 2020
CBRE Hotels | March 13, 2019
Greater Los Angeles area hotels are likely to experience another year of occupancy and room rate increases , driven by strong employment growth and travel demand Los Angeles – Mar. 13, 2019 – Continued favorable economic fundamentals are expected to lead to U.S. hotel rooms revenue per available room (RevPAR) growth of 2.5 percent in 2019 and 2.0 percent in 2020, according to the latest forecast from CBRE Hotels Americas Research. "Supply, demand and pricing in the U.S. lodging industry are very similar to what we have observed the past few years," said R. Mark Woodworth, senior managing director of CBRE Hotels Americas Rese...
Unit-Level Hotel Marketing: P&L Reveals Changes In Department Functions
CBRE | February 22, 2019
By Robert Mandelbaum and Viet Vo Technology, online intermediaries, social media, revenue management software, shared-services, and the proliferation of market intelligence reports have reshaped the way hotel Sales and Marketing Departments conduct business. The traditional organizational structure of assigning personnel by demand segments (commercial, group, leisure) has given way to assignment by function (revenue management, social media, channel distribution, customer relationship management). According to one industry executive, most of the "selling" of hotel rooms has moved from the property level to corporate and regional offices...
CBRE Issues U.S. Lodging and 2019-2020 Historic Hotels Forecast at Historic Hotels of America Annual Conference
CBRE Hotels | January 10, 2019
Historic Hotels achieve a substantial premium in ADR and RevPAR over comparable contemporary hotels. RevPAR forecast to grow faster for Historic Hotels than upper upscale Hotels. WASHINGTON, DC – January 10, 2019 The outlook for the U.S. lodging industry, particularly historic hotels, continues to be extremely strong, according to CBRE Hotels' Americas Research (CBRE). For the fourth consecutive year, CBRE Hotels' Americas Researchpresented a Historic Hotels of America – CBRE five-year forecast at the Historic Hotels of America annual conference. CBRE relies on historical hotel performance data from STR, and economic forecas...
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