Global property consultant CBRE is raising its forecasts of hotel performance for 2022 and beyond, based on Q1 2022 strength, continued slowing of construction activity, higher inflation and continued optimism about employment and economic growth.
CBRE forecasts a 29.7% growth in the 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 City, CBRE projects annual occupancy to be 77.2% in 2023 and 82% by 2024. In addition, ADR for 2023 is projected to reach $251.77, and $263.25 in 2024 as compared to $243.07 at year end 2019.
"New York remains one of the premier travel and business destinations in the world and continues to attract both international and domestic leisure demand as well as corporate executives, while waiting for the return of meaningful group demand," said Dan Hanrahan, a Senior Vice President of CBRE Hotels Advisory covering the Northeast Division. "As a result, the hotel sector has begun to rebound and is poised to return to its pre-pandemic levels in both occupancy and ADR by 2024."
Since year-end 2021, several factors, such as the Russia-Ukraine war, high gas prices and the pullback in the S&P 500 have increased the risk of a potential slowdown. However, CBRE Econometric Advisors (CBRE EA) forecasts positive GDP and employment growth and elevated Consumer Price Index (CPI) through 2023.