Dive Brief:
- U.S. hotel RevPAR declined slightly in August as compared to 2022 levels, with urban markets posting the strongest RevPAR growth, up 3.7%, according to the October edition of CBRE’s State of the Union report.
- The leisure and hospitality employment rate continued to improve, up 4.5% year over year, and according to the latest jobs report, employment in the U.S. leisure and hospitality industry increased by 16,000 jobs in September.
- Even as COVID savings start to dwindle, consumers are expected to keep traveling in earnest over the next year. CBRE is now “more optimistic” through Q2 2024, raising its 2023/2024 GDP outlook from 1.9% in June to 2.7% in September, while negatively revising its 2025 GDP forecast from 2.3% to 2.0%.
Dive Insight:
Despite the fact that consumers seem to be saving less, CBRE reports that because the average weekly earnings are outpacing RevPAR and airfare costs, consumers will continue to prioritize travel, as the industry growth rate normalizes.
The report found that U.S. hotel RevPAR declined slightly in August as compared to 2022, with upper upscale, upscale and upper midscale properties outperforming luxury, midscale and economy hotels in RevPAR growth.
Occupancy was down 1.7% as compared to August 2022, coming in at 93% of 2019 levels.
In terms of industry labor trends, according to CBRE, hotel wages in August increased 4.7% as compared to 9% in 2022, indicating a slowdown in wage growth that’s due in part to a decline in hotel job openings. For many hotel workers like those in Southern California, it isn’t just about the money. Union demands include increased healthcare contributions from hotels and better pension plans.
CBRE’s research also indicates that short-term rentals are continuing to gain ground on hotels. STR demand rose 7.6% in August as compared to the same month last year, while hotel demand growth declined 1.3%.
