Hotels Expect a Leisure Travel-Driven Summer Recovery
Skift Take
Daily Lodging Report
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Sunday, April 3The CBRE Hotels Research State of the Union showcased a pictorial review of current hotel trends, leading and coincident indicators of hotel demand and an update on cost pressures and margin flow-through. According to the report, 2022 and 2023 GDP estimates have been negatively revised from 3.5% to 2.4% and 2.1% to 1.9% respectively. Spring break travel positively impacted March performance data compared to January and February which are less leisure-oriented. CBRE is optimistic about the upcoming leisure-driven summer months. Chain scale performance showed improvement in the upper-priced segments, and CBRE is seeing some softening in the performance of lower-priced hotels. Market volatility is climbing due to high inflation rates as well as uncertainty brought on by the conflict in the Ukraine. There is also concern that rising airfares and higher gas prices could affect future travel. February’s international travel data showed improvement for major gateway markets, however, west coast Asia-dependent markets continue to lag. Although higher inflation translates into higher ADR, inflation is likely to put pressure on hotel margins in the near term. Longer-term, higher construction input costs including increased construction wages should moderate supply growth supporting ADR growth. CMBS delinquency continues to fall as hotels begin to benefit from improvements in travel over February and March.
Skift Note: Although rising airfares and higher gas prices could put a dent in the expected summer recovery, hotel exec
