In synch with recent corporate and STR U.S. hotel industry downgraded forecasts, CBRE Hotels in its December 2019 Hotel Horizons report anticipates a continued industry slowdown through 2021. Still, the report calls for continued growth during the period, albeit diminished from prior years, with higher growth rates projected to return in 2022.
The hospitality advisory company also adjusted its full-year 2019 demand outlook upward from 1.8 percent year-over-year-growth as projected in September to 2 percent, matching supply growth, and its occupancy guidance to remain flat at 66.1 percent as opposed to dipping slightly. Year-over-year room rate growth will remain limited, at 0.9 percent to $131.08, resulting in a 2019 revenue per available room forecast of 0.8 percent growth over 2018.
Beyond 2019, CBRE forecasts year-over-year demand growth to decelerate, and for occupancy levels to decrease in 2020 and 2021, but at a slower pace than reported in August, with the current economy continuing to support lodging demand, "thus perpetuating occupancy levels above 65.5 percent," said CBRE Hotels senior managing director Mark Woodworth. "By our measure, the U.S. lodging industry reached the peak of its current cycle in 2018. History calls for a downturn in 2020 or 2021. However, because the forecast declines in occupancy and real ADR are minimal, we are seeing a slight rollback in performance, which leads to sustained expansion starting in 2022."
CBRE predicts year-over-year RevPAR growth rates of 2.1 percent in 2022 and 3.5 percent in 2023.
RELATED: CBRE: Lagging GDP & Demand Growth Buffet U.S. Hotel Sector