Global real estate consultant CBRE is raising its hotel performance forecast for 2022 and beyond, based on the strength of the first quarter of 2022, the continued slowdown in construction activity, rising inflation and the continued optimism about jobs and economic growth.
CBRE forecasts a 29.7% growth in average daily rate (ADR), a 41.8% increase in demand, and a 75.06% increase in revenue per available room (RevPAR) in 2022 alone.
In New York, CBRE forecasts an annual occupancy rate of 77.2% in 2023 and 82% by 2024. In addition, the ADR for 2023 is expected to reach $251.77 and $263.25 in 2024, compared to $243.07 at the end of 2019.
“New York remains one of the world’s leading travel and business destinations and continues to attract both international and domestic leisure demand as well as business executives, pending the return of demand for meaningful group,” said Dan Hanrahan, senior vice president. of CBRE Hotels Advisory covering the Northeast Division. “As a result, the hospitality sector has started to rebound and is on track to return to pre-pandemic levels in both occupancy and ADR by 2024.”
Since the end of 2021, several factors, such as the Russian-Ukrainian war, high gas prices and the decline of the S&P 500 have increased the risk of a potential downturn. However, CBRE Econometric Advisors (CBRE EA) predicts positive GDP and employment growth and a high consumer price index (CPI) through 2023.