Citing "weaker-than-expected leisure travel and slowing corporate profit growth," CBRE Hotels Research on Thursday for the second time in three months lowered its projected year-over-year increases for full-year 2024 U.S. average daily rate, occupancy and revenue per available room. Still, the company projects a stronger second half of the year for hotel demand.
CBRE now projects 2024 U.S. RevPAR to increase 1.2 percent year over year to $100.54, down from the 2 percent increase it forecast in May. CBRE now forecasts a 1.1 percent increase in 2024 U.S. average daily rate, down from the 1.7 percent projection issued in May, and a 0.1 percent increase in occupancy, down from 0.2 percent forecast in May.
CBRE noted that it still projects second-half 2024 U.S. RevPAR to increase 2 percent year over year after first-half increased 0.5 percent.
"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," CBRE head of hotel research and data analytics said Rachael Rothman said in a statement. "Challenges including weakening consumer spending and increased competition from short-term rentals, cruise lines and other lodging alternatives pose downside risks."
CBRE senior economist and head of global hotels forecasting Michael Nhu in a statement said U.S. RevPAR could decline should anticipated interest rate cuts fail to stimulate the economy, even after second-quarter gross domestic product growth that was "stronger than anticipated."
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