Lodging Sector on Track for a Stellar 2017

February 28, 2017
The lodging sector within the commercial real estate industry enjoyed a performance peak in 2016 and is on track for another halcyon year, according to the recently released March 2017 Hotel Horizons forecast report from CBRE Hotels’ Americas Research.
The new report found rooms revenue (RevPAR) grew in 2016 for a seventh consecutive year, with solid prospects for RevPAR growth projected for the foreseeable future. Looking ahead from now through 2021, CBRE Hotels’ Americas Research is projecting that the U.S. lodging industry will achieve a RevPAR compound annual growth rate (CAGR) of 2.2 percent, while the RevPAR CAGR is projected to be 2.8 percent for the economy chain-scale.
“The upper-priced properties led the U.S. lodging industry out of the recession and have continued to achieve occupancy levels in excess of 70 percent,” said ,” said R. Mark Woodworth, senior managing director of CBRE Hotels’ Americas Research. “However, recently it has been the lower-priced properties that have shown the greatest gains in RevPAR. In the past five years, RevPAR for U.S. hotels increased at a CAGR of 5.7 percent. The only chain-scale close to achieving this pace of revenue growth was the economy segment whose average annual RevPAR increase was 5.6 percent during this period. That means independent and economy chain-affiliated properties have been the primary drivers of the industry’s recent strong performance.”