The CBRE Hotels Research State of the Union showcases a pictorial review of current hotel trends, leading and coincident indicators of hotel demand, and an update on cost pressures and margin flow-through. The report showcases current demand trends, as well as fundamentals by segment, location type and chain scale. The report also provides a brief update on short-term rental, group business, and capital market trends, the transaction market, the impact of virtual work and the outlook for office vacancy.
Key Takeaways
• The worst of 2022 is likely behind us. January was a low point, but things have started to improve in February. [12, 13, 21]
• Recent travel trend data and leading indicators indicate that trends should continue to improve over the near term. [26-27]
• The reopening of the US border in November has led to strong gains in inbound international travel, with many gateways reaching or exceeding their 2019 levels in December; however, there is still material runway for growth in 2022 and expect markets like New York, San Francisco, Miami, and Los Angeles to continue to benefit. [22, 23]
• Both OTA and brand.com have essentially recovered to pre-pandemic levels. Group and corporate travel remain the laggards. [43, 44]
• Operating efficiencies observed during the summer of 2021 waned during the back of the year. December 2021 GOP levels exceeded 2019, but full-year 2021 GOP came in 35.5% below 2019. [46 - 49]
• Stronger GOP levels resulted in a nearly 50% reduction in CMBS delinquency from December 2020 to December 2021. [52, 53]
• Short-term rental market share has normalized as hotels have reopened. Large units in southern and drive-to destinations are driving revenue growth. [31-35]
• 2022 GDP estimates have been negatively revised and rate increases could be a headwind, but an optimistic labor outlook and the ‘return to office’ should support further RevPAR gains. [4-10]
• Hotel construction expenditures continue to pull back and input cost increases will remain headwinds to incremental supply growth, boosting investor appetite for existing assets. [37-41]
Contact
Rachael Rothman
Head of Hotels Research
CBRE Hotels
[email protected]
Will Webster
Sr. Research Analyst
CBRE Hotels
[email protected]