AH November 2024
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News
10
www.asianhospitality.com
November 2024 | Issue 231
.S. RevPAR is expected to
grow by 1.2 percent this year,
down from the previously
forecasted 2 percent, according
to CBRE. Despite lower full-year
projections, second-half growth
is set to improve, with a 2 percent
increase compared to 0.5 percent in
the first half.
CBRE’s 2024 Global Midyear
Hotels Outlook attributes these
second-half growth projections to
election-related events in the U.S.,
easier year-over-year comparisons,
rising inbound international visitors,
anticipated interest rate cuts, and a
slight uptick in group and business
travel.
In the first half of 2024, RevPAR in 57
of the 65 U.S. markets tracked by CBRE
returned to pre-pandemic levels. Most
of the eight markets still lagging are
in Northern California and the Upper
Midwest. Major East Coast markets,
including New York, Boston, Washington
D.C., Atlanta and Miami, have surpassed
2019 levels.
Although CBRE anticipated a slowdown,
growth has been more modest than
expected, despite a resilient economy.
Challenges such as record outbound
international travel, weaker consumer
demand, and increased competition from
short-term rentals, cruise lines and other
alternatives have offset the recovery in
inbound travel and the modest rise in
group and business travel.
U.S. outlook
The largest reduction in full-year
RevPAR growth is for resort locations,
now projected to see flat growth
compared to the previously forecasted
1.6 percent increase. While leisure travel
demand remains, more Americans are
vacationing in Europe, Central America
and Latin America, increasingly opting
for cruise lines and short-term rentals,
which erode traditional hotels' market
share.
CBRE's baseline forecast for 2024
predicts GDP growth of 2.6 percent and
average inflation of 2.9 percent. Following
stronger-than-expected GDP growth in
the second quarter, CBRE anticipates
a slowdown in the second half of the
year and into 2025. Softening consumer
spending and increased competition from
lodging alternatives will reduce hotel
demand.
Due to high construction and financing
costs, CBRE expects modest hotel supply
growth of under 1 percent over the next
three years. Rising global wealth and
limited supply growth are projected to
support strong hotel fundamentals in the
long term.
RevPAR is projected to grow at a
compound annual growth rate of
2.5 percent over the next five years,
barring a recession or external shocks
to the global economy. Urban hotels
are expected to outperform, with a
RevPAR CAGR of 3.5 percent, as they
have been the slowest to recover and will
benefit most from increased inbound
international travel.
In August, CBRE lowered its U.S. hotel
forecast, projecting a 1.2 percent RevPAR
increase for 2024, down from the 2
percent estimated in May. The research
group anticipates 2 percent RevPAR
growth in the second half of 2024, up
from 0.5 percent in the first half, driven
by international tourism and election-
related events.
Global markets
The outlook for Northern Latin
America, including Colombia, Costa
Rica, and Mexico, remains strong,
with occupancy in Costa Rica
projected to exceed its 2019 level of
67 percent. Colombia's hospitality
sector is expected to attract more
than 6 million tourists this year,
driven by an improving economy,
lower inflation, interest rate cuts,
and government initiatives. Tourism
in Mexico will also remain robust,
attracting foreign investors and
bolstering the country’s position as
a leading global tourism market.
Europe’s hotel and tourism sectors are
poised for continued expansion, though
at a more modest pace than in recent
years. CBRE projects healthy growth for
key European gateway cities, driven by
an increase in inbound international
travelers and corporate travel.
Luxury and resort locations are
expected to outperform other segments,
reflecting high-income travelers'
preference for personalized experiences
and diminished macroeconomic
headwinds. However, following strong
gains in 2023, RevPAR growth is projected
to decelerate to around 5 percent this year,
primarily due to weakening U.S. demand.
CBRE’s outlook for the Middle East
remains positive, supported by robust
growth in the first half of the year.
During this period, hotel operational
performance improved in nearly all
major cities in the Gulf Cooperation
Council. Tourism-related megaprojects
were announced in Saudi Arabia, and
regulatory changes in the U.A.E. are
expected to boost the hospitality sector.
In the Asia Pacific region, all
hotel markets, except the Maldives,
experienced year-over-year increases
in RevPAR in the first half of the year.
Despite challenges such as stafÏng issues
and aircraft shortages, the region has
seen significant growth in airline travel
this year.
CBRE: U.S. RevPAR to rise 1.2
percent in 2024, 2 percent in H2
RevPAR in 57 of the 65 U.S. markets tracked by CBRE hit pre-pandemic
levels in H1 2024.
U.S. RevPAR is expected to grow by 1.2 percent this year, down from the
earlier forecast of 2 percent, according to CBRE. However, second-half
growth is projected to improve, with a 2 percent increase compared to
0.5 percent in the first half.
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