CBRE U.S. Hotels State of the Union - September 2022
Economy:
- 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.
- Unemployment remains low but is expected to increase. Full employment and worker shortage will lead to further wage pressures.
- CBRE expects higher and more persistent inflation. Inflation is expected to remain above the long-run average of 3.3% until 2024.
Current Trends:
- August RevPAR weakens. Most chain scales and location types saw a pullback relative to 2019.
- TSA throughput data remains above 90% of 2019 post Labor Day. TSA data and Google search trends data continue to be positive.
- Consumer and business outlook is softening. Credit levels are on the rise while business and consumer confidence wane.
Food for Thought:
- Post Labor Day return-tooffice disappoints. A disappointing return-to-office is a headwind to business travel.
- International travel continues to rebound. Despite FX headwinds, we expect international travel to drive demand.
- The inflationary environment is leading to margin pressures. July margins declined 420 basis points year over year.
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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.
