US Hotels State of the Union September 2022 Edition

A Pictorial Update on Our Latest Thoughts and the Facts and Figures Influencing Our Industry

The CBRE Hotels Research State of the Union showcases a pictorial review of current hotel trends, leading and coincident indicators of hotel demand, and an update on cost pressures and margin flow-through. The report showcases current demand trends, as well as fundamentals by segment, location type and chain scale. The report also provides a brief update on short-term rental, group business, and capital market trends, the transaction market, the impact of virtual work and the outlook for office vacancy.

Key Takeaways

• CBRE calls for a mild recession in 2023. GDP is expected to be flat in 2023 with negative growth in H1 2023 and positive growth in H2 2023.
  [Slides 5-8]

• Unemployment remains low but is expected to increase. Full employment and worker shortage will lead to further wage pressures.
  [Slides 10-17]

• CBRE expects higher and more persistent inflation. Inflation is expected to remain above the long-run average of 3.3% until 2024.
  [Slides 19-22]

• August RevPAR weakens. Most chain scales and location types saw a pullback relative to 2019.
  [Slides 24-34]

• TSA throughput data remains above 90% of 2019 post Labor Day. TSA data and Google search trends data continue to be positive.
  [Slides 36, 43, 44]

• Consumer and business outlook is softening. Credit levels are on the rise while business and consumer confidence wane.
  [Slides 41-42]

• Post Labor Day return-to-office disappoints. A disappointing return-to-office is a headwind to business travel.
  [Slides 46-48]

• International travel continues to rebound. Despite FX headwinds, we expect international travel to drive demand.
  [Slides 50-52]

• The inflationary environment is leading to margin pressures. July margins declined 420 basis points year over year.
  [Slides 54-59]