news-10082024-031225

In the latest CBRE U.S. Hotels Report for June 2024, it was revealed that the Revenue Per Available Room (RevPAR) growth slowed to 0.6% while occupancy declined by 1.0%. This decrease in growth was attributed to various factors, including changes in holiday schedules affecting RevPAR numbers over the past few months. Despite this slowdown, year-to-date RevPAR is up by 0.5%, which is consistent with the numbers from June.

When looking at the overall economy, the report indicated that GDP growth is expected to slow down following a better-than-expected performance in the second quarter of the year. Real GDP growth reached 2.8% in Q2, surpassing the CBRE’s initial estimate of 2.0%. However, it is anticipated that this strong growth in Q2 could balance out the lower growth expected in the latter part of the year. Inflation is also set to remain persistent, ending the year at 3.1%, which is slightly higher than previously projected.

Consumer risks were highlighted in the report, pointing out that wages are moderating and unemployment rates are increasing. With unemployment rising to 4.1% and employment growth slowing down to 0.1%, consumer sentiment has been affected. The saving rate also fell to 3.4%, contributing to the decline in consumer confidence from 68 in June to 66 in July. Despite these challenges, wage growth still remains higher than inflation rates.

In terms of borrowing rates, CMBS rates continued to decline in June, reaching 7.7% compared to 9.0% in June 2023. This decrease is partly due to a contraction in credit spreads. Additionally, CMBS loan issuance nearly tripled from $0.6 billion in June 2023 to $1.6 billion in June 2024, with the average loan size remaining relatively stable.

Looking at current trends in the hotel industry, the report highlighted that upper-tier hotels outperformed lower-tier ones in terms of RevPAR growth. Urban hotels also saw significant growth in June, with a 2.8% increase in RevPAR. Brand.com bookings continued to gain share from other distribution channels, reaching 120% of 2019 levels. GOP growth in May showed a positive trend, with a 6.0% increase and a total revenue growth of 5.1%.

The report also touched upon the rise in demand for short-term rentals, which saw a 9.8% growth in June, while hotel demand declined by 0.4%. Competition from alternative lodging sources, such as cruise lines and short-term rentals, has impacted the demand for traditional hotel room nights. Inbound international travel remains below pre-pandemic levels, affecting overall demand in the hotel industry.

Overall, the CBRE U.S. Hotels Report for June 2024 provides a comprehensive overview of the current state of the hotel industry, highlighting both challenges and opportunities for growth in the coming months.

For more detailed information and insights, you can download the full report from the provided link.