cbre
CBRE Hotels Expects RevPAR Growth Recovery Following Summer Slowdown
CBRE Group, Inc. | November 16, 2023
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 indu...
Hotel Financial Performance Influenced by Changes in Hotel Food and Beverage Offerings
Robert Mandelbaum, Ed Stacy | October 30, 2023
By Robert Mandelbaum and Ed Stacy The 2020 COVID-influenced lodging industry recession resulted in some noticeable changes to the way hotels provide food and beverage (F&B) service. • Social distancing regulations forced operators to be creative in the way they served food and beverages to guests. • Rising wage rates and sharp increases in the cost of food and beverage products compelled hotel managers to find ways to control costs. • The inability of hotels to attract employees to fill the positions eliminated during the recession required creative solutions to improve productivity and offer more with less. These facto...
Swinging Success? Unraveling the Impact of Golf on Resort Performance Post Pandemic
Krish Vipani | October 26, 2023
By Krish Vipani Without a doubt, leisure sports picked up in popularity during the COVID-19 pandemic- especially golf. According to the National Golf Foundation, 67% of golfers credited their increased play in the late summer of 2020 to having “fewer alternative ways to spend leisure time”. Not only did existing golfers increase their time on the course, but the National Golf Foundation also reports 25.6 million golfers on the course in 2022, a 1.3 million increase from 2019. Moreover, the National Golf Foundation reports an average of 21.1 rounds of golf played per golfer in 2021. This is the greatest average number of rounds per play...
Hotel Property Tax Relief Varies by Geography
CBRE Hotels | October 2, 2023
By Robert Mandelbaum and David P. Fuller MAI Based on a sample of more than 3,000 hotels from CBRE’s Trends® in the Hotel Industry database, U.S. hotel property tax expenditures averaged $2,626 per available room (PAR) in 2022. This is 10.8% less than the $2,943 PAR recorded in 2019, before the COVID-19 pandemic. Concurrently, the earnings before interest, taxes, depreciation, and amortization (EBITDA) for these same properties fell by 1.7%. From 2019 to 2022, the combination of EBITDA decreases, and cap rate increases put downward pressure on values. A 100 bp increase in cap rates, coupled with the 1.7% decrease in EBITDA correlate...
Guest Loyalty Programs Provide, But They Cost
Robert Mandelbaum, Christine Bang | September 5, 2023
By Robert Mandelbaum and Christine Bang Over the years, the fees hotel owners pay to franchise companies have typically grown at a pace greater than the rise in hotel rooms revenue. Most franchise-related fees are charged as a percent of rooms revenue, and therefore, by assessing the relative changes in rooms revenue and franchise fees we can make some assumptions. In 2021, acknowledging the financial stress hotel owners faced during the pandemic, the franchise companies were sympathetic and provided some reprieve. While rooms revenue increased by 55.4% in 2021, total franchise-related fees rose by just 45.9%. Equilibrium returned in ...
CBRE Hotels Reduces Near-Team Outlook Due to Softer Summer Demand
CBRE Group, Inc. | August 17, 2023
Dallas – August 17th, 2023 – CBRE is reducing its forecast for hotel performance this year, as weaker-than-expected summer demand resulted in a shortfall in Q2 2023 revenue per available room (RevPAR). CBRE has revised its forecast for 2023 RevPAR to $96.64, up 4.6% year-over-year, but down $1.25 from its previous forecast in May 2023. The revision is predicated on a 70-basis-point (bps) decrease in expected occupancy compared with the earlier forecast. Average daily rate (ADR) is expected to increase by 3.6% in 2023, down 10 bps from the previous forecast. CBRE’s baseline-scenario forecast anticipates 1.6% average GDP growth and a...
As Occupancy Stalls, Parking Drives Hotel Revenue Growth
Todd Casper | July 6, 2023
By Robert Mandelbaum, Todd Casper Based on our February 2023 Hotel Horizons® report, CBRE is forecasting that total hotel revenue for the average U.S. hotel returned to pre-COVID levels in 2022. This occurred despite the fact that the average occupancy for U.S. hotels is not expected to exceed 2019 levels until 2026. With occupancy levels lagging during the post-COVID recovery and guest counts depressed, hotel owners and operators have had to look for alternative sources of revenue beyond the rental of guest rooms to make up for the income deficits. For some hotels in the U.S., parking has become a profitable source of revenue since CO...
U.S. Hotel Owners Eyeing Interest Coverage
Bill Grice and Robert Mandelbaum | June 1, 2023
By Bill Grice, Robert Mandelbaum According to CBRE’s February 2023 Investment Performance forecast, total revenues for the average U.S. hotel returned to 2019 levels in 2022, but the recovery of hotel profits will be delayed until later this year. Hotel franchise and management companies have benefited the most from the ongoing revenue recovery because the fees they receive are frequently earned as a percent of revenue. However, for many hotel owners, along with their lenders and investors, the lag in the return of profits has been a hardship. Afterall, it is the profits of hotel operations that enable owners to pay their debt obli...
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