CBRE (NYSE:CBRE) is forecasting the lodging industry will record a growth in revenue per available room (RevPAR) during 2024 as inbound international travel further improves and sector-specific headwinds moderate.
The company’s 3% RevPAR growth forecast for 2024 is fueled 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 added that its forecast is based on an 0.8% average GDP growth and 2.9% average inflation in 2024, noting that the correlation between GDP and RevPAR growth will impact the lodging industry.
“U.S. hotel operators faced stiff headwinds to demand and pricing power over the summer due to the number of Americans who elected to vacation overseas, go on cruises or stay in short-term rentals or other alternative forms of lodging,” said Rachael Rothman, CBRE’s head of hotel research and data analytics. “We expect RevPAR trends to improve modestly as we head into 2024, as these headwinds ease and the number of inbound international travelers further recovers.”
“It is uncommon for U.S. hotel performance to weaken when economic growth is resilient and consumers are spending at record levels; however, we are optimistic that the eventual return of more than 4.7 inbound international travelers will boost occupancy and pricing power back toward their historical trend lines,” added Michael Nhu, senior economist and CBRE’s head of global hotels forecasting.