Skip to content

Search

Latest Stories

Delta variant forces CBRE to revise its economic forecast

U.S. hotels’ occupancy is expected to average 54 percent for the year

Delta variant forces CBRE to revise its economic forecast

THE LONG-AWAITED RETURN of business travel may be delayed as a result of the Delta variant of COVID-19, according to CBRE Hotels Research. As a result, the firm has revised its forecast for the year’s fourth and final quarter.

CBRE’s new forecast will extend into 2022 under the expectation that corporate travel budgets will remain constrained until that time. The firm said the momentum the industry developed over the summer due to a surge in leisure travel has been handicapped by Delta’s impact on business travel, leading to a “second-derivative” market condition in which the recovery continues but at a slowing pace.


“The Delta variant and increasing number of COVID infections led to delays in ‘return to office’ plans at many firms and coincided with the start of the 2022 travel-budgeting season,” said Rachael Rothman, CBRE’s Head of Hotel Research & Data Analytics. “Unfortunately, for business centric hotels, the rebound in business travel expected in September of 2021 is now delayed and will likely have a ripple effect into 2022’s corporate travel budgets.”

U.S. hotels’ annual occupancy level is now expected to reach 54 percent for the year, according to CBRE. ADR is expected to average $112.85 and RevPAR is forecast to average $60.91, a 41.7 percent increase over the annual RevPAR of $42.97 recorded in 2020. However, the RevPAR amount is 29.3 percent less than the $86.16 RevPAR posted in 2019.

CBRE said it expects convention travel to resume first in markets with low operating costs, inexpensive airline flights and relatively few health restrictions. Warm-weather markets, such as Dallas, New Orleans, San Antonio, Las Vegas and Orlando are likely to be in demand. Leisure and “bleisure” travel, which is a combination of business and leisure travel, are expected to augment the regular business travel even though 2022 corporate-travel budgets are being impacted by the Delta variant.

Occupancy is still expected to rise 8 percent in 2022 while ADR should go up 7.1 percent, leading to a 15.6 percent increase in RevPAR. Much also depends on activity in each hotel’s local markets because 75 percent to 80 percent of a hotel’s performance is dictated by local economic and market factors, according to CBRE.

“In general, Sunbelt cities and drive-to leisure destinations are expected to perform the best, while group-oriented hotels, northern markets, and global gateway cities reliant on inbound international travel are projected to lag in performance,” said Bram Gallagher, CBRE’s senior hotel economist. “The pace of recovery for business and group demand is top of mind for most hoteliers.”

Urban-core markets are expected to be most heavily impacted by the delayed return to office and the ‘great migration south’ that took place over the pandemic. Also, business travelers are expected to take fewer but longer trips to avoid flights that might expose them more to COVID. They also are expected to stay longer in leisure markets in order to incorporate “shoulder stays” that allow for leisure time after the business time.

CBRE predicts that U.S. national occupancy will approach the long-run average of 62 percent in 2023.

“However, occupancy isn’t expected to return to its lofty pre-COVID rates in the foreseeable future, given that many general managers and prioritizing rate gains despite the potential resulting drop in occupancy,” CBRE said in a statement. “CBRE anticipates that nominal ADR levels will reach the prior peak by the second quarter of 2023. On a combined basis, the improvements in ADR and occupancy should lead to a full recovery in nominal RevPAR by 2024.”

In July, CBRE predicted U.S. lodging demand will return to pre-pandemic levels by the fourth quarter of 2023.

More for you

G6 Hospitality RMS Program Powers Q1 2025 Growth

G6 RMS properties log 11 percent Q1 revenue gain

Summary
  • The G6 RMS program uses automation, comp tracking and strategy calls.
  • RMS properties saw 11 percent year-over-year revenue growth in Q1 and a 10 percent higher ADR.
  • Revenue-managed properties posted 11.5 percent growth through web and app channels.

PROPERTIES OF G6 Hospitality enrolled in its “G6 Revenue Management Services” program saw 11 percent year-over-year revenue growth in the first quarter of 2025, more than double the rate of the rest of the portfolio. They also recorded a 10 percent higher ADR than non-RMS properties.

The RMS program uses proprietary automation tools, daily competitive set monitoring and bi-weekly strategy calls with revenue managers, G6 said in a statement. G6 is the parent company of Motel 6 and Studio 6 brands.

Keep ReadingShow less
Peachtree Group's Residence Inn by Marriott under construction in downtown San Antonio, topping out milestone reached, June 2025

Peachtree tops out San Antonio Residence Inn

Peachtree Hotel to Open in Summer 2026 with 117 Extended-Stay Rooms

PEACHTREE GROUP HELD a “topping out” for its Residence Inn by Marriott in downtown San Antonio, Texas, marking completion of the structural phase of the 10-story, 117-room hotel. The property, co-developed with Austin-based Merritt Development Group, is scheduled to open in summer 2026.

The extended-stay hotel will be owned by Peachtree and managed by its hospitality management division, the company said in a statement.

Keep ReadingShow less
Air India plane crash 2025
Photo by Sam PANTHAKY / AFP

Air India reducing flights after deadly crash

AIR INDIA WILL reduce international service on widebody aircraft by 15 percent through at least mid-July, according to media reports. The decision comes less than a week after the June 12 crash of an Air India airliner carrying 230 passengers and 12 crew members in Ahmedabad, India, that killed 246 but left one survivor among the passengers.

The airline said the reduced service due to the safety inspection of aircraft and ongoing geopolitical tensions in the Middle East, which have disrupted operations, resulting in 83 flight cancellations over the past six days, according to ABC News. Passengers can either reschedule their flights at no additional cost or receive a full refund.

Keep ReadingShow less
hihotels executive team honored for long-term service and loyalty in hospitality

Hihotels recognizes eight company leaders

EIGHT LEADERS OF hihotels by Hospitality International, Inc. are being recognized by the company for their combined 121 years of service. The company was established in 1982 as an alternative to other, established brands.

The honorees include Paul Vakharia, hihotels’ senior director of franchise development for the Northeast Region who has been with the company for 25 years. Chhaya Patel, franchise development coordinator, also has been with the company for 25 years.

Keep ReadingShow less
ICE Raid Resumes in Hotels & Farms After DHS Reversal
Photo by Mario Tama/Getty Images

Reuters: ICE resumes hotel immigration raids

ICE Reverses Decision to Pause Raids on Key Industries

U.S. IMMIGRATION OFFICIALS have reversed enforcement limits at hotels, farms, restaurants and food processing plants days after issuing them, following conflicting statements by President Donald Trump, according to Reuters. ICE leadership told field office heads on Monday it would withdraw last week's directive that paused raids on those businesses.

ICE officials were told a daily quota of 3,000 arrests—10 times the average last year under former President Joe Biden—would remain in effect, two former officials said in the report. ICE field office heads raised concerns they could not meet the quota without raids at the previously exempted businesses, Reuters reported, citing a source.

However, it was not clear why the directive was reversed.

Keep ReadingShow less