Intelligent Investment

US Hotels State of the Union February 2023 Edition

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

March 1, 2023 15 Minute Read

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Key Takeaways:

  • Economy

    Personal savings rate increased for the eighth consecutive month.
    Personal savings rate continued to increase in January to 4.7% up from the low of 2.7% in June 2022.

    Job openings per hotel increased in December.

    Job openings per hotel increased to 30 in December near the all-time high of 31 in December 2021. This is consistent with the trend in national job openings.

    Hotels continued to face wage pressures in January.

    Hotel wages increased 7.2% in January, higher than the 4.6% increase in retail wages. Labor shortages suggest wages will remain elevated.                
  • Current Trends

    GOP margins contracted again in December.
    Higher labor and utility costs impacted GOP margins for the seventh straight month. Despite margin contraction, profit dollars increased 7% Y-o-Y.

    Office attendance continues to lag.

    Following the holiday period, office attendance failed to reach 50% in February and is below October 2022 levels.

    RevPAR relative to 2019 levels was steady. 

    January RevPAR increased 26% Y-o-Y owing to easier Omicron comparisons in 2022, relative to 2019 RevPAR trends which remained consistent at 106%.
  • Food for Thought

    CBRE raises RevPAR estimate for 2023.                                                
    With RevPAR recovered to 2019 levels in 2022, CBRE increased its 2023 RevPAR estimate by $0.43 to $97.46 a 5.8% increase Y-o-Y.

    Post-pandemic credit spreads have widened 145 bps. 
    While profits have increased, interest rates and spreads continued to widen in January.

    Real consumer credit is below pre-pandemic highs.

    Contrary to popular narrative, real consumer credit levels remain below pre-pandemic highs representing 6.7% of real personal disposable income