THE U.S. LODGING outlook is good through 2020 but an economic ‘blip’ will cause a slowdown in 2021, according to CBRE Hotels Americas Research. On the bright side, the market should be back to normal by 2022.
CBRE’s Hotel Horizons March 2019 edition predicts an increase of 2.5 percent in RevPAR this year and a 2 percent rise in 2020. The forecast for 2021 points to a slight decline of 0.6 percent in RevPAR, but for hoteliers that is immediately followed by a growth of 1.4 percent for 2022.
“I would characterize the economic slowdown in 2021 as a blip, not a dip. Further, the performance of the U.S. lodging industry in 2021 should be viewed as a slowdown, not a recession,” said Mark Woodworth, CBRE’s senior managing director. “In fact, we see the U.S. hotel market bouncing back strong in 2022 with a 2.5 percent increase in demand.”
CBRE Econometric Advisors predicts the pace of GDP growth to be 2.4 percent this year, 1.5 percent next year, and 0.7 percent in 2021.
“We have identified several factors that have muted ADR growth the past few years. These include low levels of inflation, increasing competition from non-traditional forms of lodging and the intervention of intermediary sales channels,” said John (Jack) Corgel, professor of real estate at the Cornell University School of Hotel Administration and CBRE’s senior advisor.
Lodging demands are expected to increase by 1.9 percent in 2019 and 1.2 percent in 2020, followed by a 0.1 percent decline in 2021.
“Despite the first indications of a potential softening in U.S. lodging performance, the industry still is forecast to operate at exceedingly high occupancy levels and profit margins. The growth story may not be as strong as hoteliers would prefer, but I would hardly classify hotel sector performance as poor,” Woodworth said.
In January, STR also forecast a 0.2 percent decrease in occupancy in 2020 to 66.1 percent, the first decline in U.S. occupancy since 2009. ADR should rise 2.2 to $135.68 and RevPAR should rise 1.9 percent to $89.65, according to STR.
Last year’s Atlanta Lodging Outlook 2019 conference also predicted continued growth for the next two years but also expressed concern over the possibility of overbuilding supply and development of an asset-price bubble.