HISTORIC HOTELS REGISTERED with Historic Hotels of America have an advantage in a slowing lodging market, according to an article from CBRE Hotels Research. The research firm is forecasting a 1.2 percent RevPAR increase for this year compared to a national projection of 0.9 percent for all U.S. hotels, and 0.8 percent for contemporary upper-upscale and luxury hotels.
For 2020, RevPAR for HHA registered hotels is projected to grow 2 percent compared to 1.2 percent overall and 1.3 percent for luxury and upper-upscale, according to information CBRE Director of Research Information Services Robert Mandelbaum presented at HHA’s recent annual conference. The forecasts are based on data from STR.
“Given the outlook for the U.S. economy for the next few years, we are forecasting a slowdown in the performance for the overall U.S. lodging industry through 2021,” Mandelbaum said.
There are several factors Mandelbaum discussed at the conference.:
- The aggregate RevPAR for HHA member hotels through August of 2019 is $170.53, according to STR. That is between the national averages for all U.S. upper-upscale, $142.67, and luxury hotels, $252.48.
- HHA-registered hotels saw higher revenue growth from 2014 to 2018 compared to comparable contemporary hotels, according to CBRE’s database of hotel operating statements. However, because they are operating within older buildings, historic hotels face greater maintenance and utility costs.
- Annual occupancy levels for HHA hotels are forecast to achieve an occupancy premium of 6.8 percentage points above the national average occupancy level through 2023.
- CBRE is forecasting a slowdown in the performance of the U.S. lodging industry from 2019 through 2021. On a comparative basis, the forecast deceleration in the compound annual growth for RevPAR at historic hotels (1.4 percent) will not be as deep as the projected RevPAR slowdown for luxury (0.9 percent) and upper-upscale (1.1 percent) properties during the period.
- Like all U.S. hotel operators, historic hotel managers will be challenged to control rising labor costs in an environment of sluggish revenue growth.
“Historic hotels will continue to achieve a significant advantage in occupancy, ADR and RevPAR versus contemporary hotels, especially when recognized as part of Historic Hotels of America,” said HHA and Historic Hotels Worldwide Executive Director Lawrence Horwitz.
In its January presentation to HHA, CBRE forecast HHA hotels would see an average annual RevPAR growth rate of 1.45 percent over the next two years, higher than the 0.5 percent growth forecast for upper upscale but less than the 3.95 percent forecast for luxury hotels.