US Lodging Industry To Experience Full Recovery By 2023: Report

Zinger Key Points
  • Q1 revenue per available room was up 61% year-over-year.
  • There is no current evidence that the high-inflation economy is dampening the sector.

The U.S. lodging industry is on track for a full recovery in 2023 from the pandemic-induced chaos, according to a new forecast from CBRE CBRE.

What Happened: Despite a slowdown in new hotel construction and the current high-inflation economy, CBRE is pointing to a full recovery in average daily rate (ADR) this year and in demand and revenue per available room (RevPAR) next year.

CBRE noted that the threat of the omicron variant did not damper the lodging sector’s vibrancy, with first-quarter RevPAR at $72.20, up 61% year-over-year. RevPAR growth was fueled by a 39% spike in ADR and a 16% rise in occupancy. First-quarter ADR was also 5% above 2019’s level, making it the third consecutive quarter in which levels exceed the same period in the pre-pandemic era.

See Also: Raz Report: Ric Flair's Wooooo Chews and Mike Tyson's Mike Bites

What Else Happened: CBRE predicted better relative performance for hotels in drive-to leisure destinations, particularly within high-end properties that attract consumers who are less burdened by high inflation rates. However, the company noted that higher gas prices, food costs and mortgage rates could potentially dissuade budget-minded consumers who frequent interstate hotels from making travel plans — although that is not evident at the moment.

“To date, there has been no sign that the more than 50% increase in gas prices and the stock market’s hovering near bear-market territory are dampening hotel demand,” said Rachael Rothman, CBRE’s head of hotel research and data analytics.

“However, in the past, a steep decline in the S&P 500 and high gas prices have often caused RevPAR growth to decline, which raises the specter of a pullback in RevPAR later this year. Despite this possibility, our outlook remains that the market will continue to recover.”

Posted In: commercial real estatehotelsLodgingPandemicNewsReal Estate

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.