CBRE, the commercial real estate services and investment firm, is forecasting that revenue per available room (RevPAR) will continue to grow steadily in 2024, driven by improving group business, inbound international travel and traditional transient business demand.
CBRE forecasts a 3% increase in RevPAR growth in 2024, with occupancy improving by 45 basis-points and average daily rate (ADR) increasing by 2.3%. This projected growth indicates the continued recovery of the lodging industry, with RevPAR in 2024 expected to be 13.2% higher than 2019 levels.
Rachael Rothman, head of hotel research and data analytics, said the company expects RevPAR growth to be slower in the first quarter due to last year’s strong performance, but to reach its peak in the third quarter driven by the influx of inbound international travelers during the busy summer season. “Urban and airport locations should particularly benefit from group and inbound international travel, as well as the normalization of leisure travel,” she said.
CBRE expects muted supply growth in the medium term due to elevated financing and construction costs, as well as the limited availability of properties that can be purchased below replacement costs. For 2024, CBRE expects supply growth of just under 1%, with hotel supply projected to maintain a compound annual growth rate of 0.87% over the next three years.
Image: Courtesy of CBRE
