U.S. Hotels State of the Union February 2023 Edition
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.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world's largest commercial real estate services and investment firm (based on 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
