Unlike other segments of the U.S. lodging industry, residential conference and meetings venues (formerly known as conference centers) are forecast to enjoy greater performance growth during 2020 than they did in 2019. This is in contrast to CBRE’s forecast of a performance slowdown for the overall U.S. hotel market.
While less than the long-run average, the 1.9% RevPAR increase forecast for conference and meeting venues in 2020 is greater than the 0.7% gain projected for 2019. For 2020, conference and meeting venues are expected to achieve a 0.3% occupancy gain, along with a 1.6% rise in ADR. Both growth rates are greater than the U.S. national averages for 2020.
A lack of new competition accounts for the enhanced growth rates. The inventory of new conference and meeting venue rooms is forecast to increase by just 1.0% in 2020. This is almost half the national supply growth rate forecast for the overall U.S. hotel market. Given the nature of their market orientation, conference and meetings venues typically offer enhanced meeting and public spaces, which goes against the recent design trends for most other types of hotels. This increases the development cost per room, and therefore contributes to the relative lack of new supply.
Not only are conference and meeting venues forecast to achieve greater growth rates, they are also projected to achieve premiums in ADR and RevPAR values. In 2020, the ADR for the conference and meeting venues market is forecast to be $161.13, a premium of 21.3% over the industry-wide average. The higher ADR is the primary contributor to the 19.4% RevPAR premium achieved by conference and meetings venues.
The enhanced RevPAR earned by these properties is certainly a benefit. However, industry participants know the revenues from food and beverage, conference services, and recreational amenities that are rolled into the Complete Meeting Package rates (CMP) provide conference and meetings venue owners with the additional funds needed to justify development.
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CBRE, in conjunction with the International Association of Conference Centers (IACC), prepares quarterly forecast reports for the U.S. residential Conference and Meetings Venues market. To subscribe to CBRE’s Hotel Horizons®
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