The Independence Day edition of CBRE U.S. Hotels’ State of the Union highlights a collection of current industry and capital market trends, key leading indicators, economic drivers, commodity cost increases, and its latest outlook on supply demand and the RevPAR recovery.
The overview looks at the factors influencing both leisure and business travel and underscores the message that the recovery is well underway from both a fundamental and a lending perspective. Unfortunately, not all markets are poised to benefit equally. The State of the Union showcases the leaders and the laggards by market.
Here is a summary:
- The labor market continues to brighten. College-educated unemployment is now just 70-bps below pre-pandemic levels and overall unemployment is now 5.8%, a 50-bps improvement since the beginning of the year.
- RevPAR growth continues to steadily improve with ADR growth leading the way. Occupancy remains the laggard. In recent weeks, occupancy has accounted for more than 70% of the RevPAR shortfall vs. 2019.
- Global travel restrictions are benefitting U.S. hotel demand and there has been a transformation in foreign visitation patterns.
- Business investment is at an all-time high, and elevated business confidence should boost corporate travel as offices reopen and children return to school.
- Record household checkable deposits and improving consumer confidence are fueling demand for leisure travel, particularly at all-inclusive resorts.
- Raw materials inflation and wage pressures will be a headwind to new construction starts; however, the reopening of hotels and the buildout of the residual pipeline will have a meaningful impact on several markets.
- An overview of our updated national and by market forecasts are available, as well as an update on the health of the debt capital markets.