CBRE (NYSE:CBRE) has revised its forecast for 2024 U.S. hotel performance, citing weaker-than-expected leisure travel and the slowing in corporate profit growth.
CBRE is now projecting a 1.2% increase in revenue per available room (RevPAR) growth for 2024, down from the 2.0% estimated in May. CBRE is also forecasting a 2% year-over-year growth in RevPAR in the second half of this year, up from 0.5% year-over-year growth in the first half – the company expects international tourism and election-related events to fuel this upswing.
CBRE retains its previous forecast that RevPAR will achieve a nominal record of $100.54 this year, representing 114.5% of pre-pandemic levels in 2019. This outlook is based on projected average daily rate growth of 1.1% and a 10-basis point increase in occupancy.
Furthermore, CBRE is forecasting GDP growth of 2.3% and average inflation of 3.2% for this year. The company noted the tradition of strong correlation between GDP and RevPAR growth in making this forecast.
“We expect low single-digit RevPAR growth over the near-term as election-related events, growth in inbound international travel, and an anticipated lower interest rate environment should support hotel demand,” said Rachael Rothman, CBRE’s head of hotel research and data analytics. “Challenges including weakening consumer spending and increased competition from short-term rentals, cruise lines and other lodging alternatives pose downside risks.”
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