In an article we published in February 2021, before the COVID-19 vaccines were broadly rolled out, we suggested to owners of hotels in Florida, and waterfront hotels in the Sunshine State in particular, that their assets would soon be in high demand.
Atlanta’s rise in reputation as the event and convention hub of the southeast, a vision first ignited by the hosting of the 1996 Olympics, reached a zenith in 2019 with the hosting of Super Bowl LIII, marking Atlanta’s second time hosting the Super Bowl in the last 20 years. The data below, provided by the Atlanta Convention & Visitors Bureau, illustrate the steady growth in visitors to the city and their spending in the years preceding the COVID-19 pandemic.
What a year. 2022 was a mix of setbacks and recovery, coupled with seemingly contradictory economic and consumer data.
Salt Lake City benefits from one of the busiest airports in the western U.S. and a strategic location near several landmarks and tourist attractions, including the Mighty 5. Transient demand to the city surged in 2021 as Utah became a popular drive-to leisure destination, but commercial travel continues to lag behind 2019 levels, similar to the rest of the nation. Commercial demand is expected to return fully by year-end 2023 or the beginning of 2024. Nonetheless, the city has enjoyed increases in demand as the local economy has recovered from the effects of the COVID-19 pandemic in 2020. Most notably, the market has enjoyed a significant increase in ADR levels, especially thus far in 2022. In addition to the overall strength of the local economy, Salt Lake City has become a focal point for new development in recent years.
The primary economic engine of Coastal Maine, also known as Vacationland, is the summer tourist season, which experienced tremendous growth in 2021 and continued strengthening in 2022. Attractions such as Acadia National Park, local beaches, lighthouses, and a host of restaurants, bars, breweries have remained the drivers of leisure travel.
Amadeus, a global leader in travel technology, with its unique ability to track forward-looking occupancy in major markets around the world, is seeing a positive trend in U.S. hotel bookings for the 2022 holiday season. Amadeus’ Demand360® business intelligence data shows that as of December 8, 2022, U.S. occupancy for the last two weeks of the year (Dec 18-31) is currently at 27%, pacing 1% behind the same time in 2019 and for the week of December 25, 2022, six of this year’s top 10 markets exceed 2019 occupancy.
Moving into 2023, the hospitality industry continues to advance in guest-facing as well as back-office technology, allowing hotel owners and management groups the ability to increase revenue, lower labor costs, and streamline accounting functions, all while realigning resources to improve the guest experience. Some trends have been around for a while and continue to advance, such as cloud-based platforms, while there are others in the hospitality industry taking steps toward smart hotels and artificial intelligence. Over the course of 2023, you will see the industry shift to a level of progressiveness that we’ve never seen before by using more automation and contactless options as we build the bridge between the digital and physical worlds.
Last month Los Angeles voters approved Measure ULA, imposing a new tax on all real property sales or transfers over $5 million. This will affect all parties involved in a real property transaction, and it is important to understand the implications of the measure before negotiating on a new project. My colleague David Tabibian, partner in JMBM’s Real Estate Department and Global Hospitality Group®, explains the initiative and its potential impact below.
As another year comes to a close, we hope Tambourine’s Flash Reports sparked a new way of thinking or brought a new marketing concept to light. Here are the five most read Flash Report articles of 2022.
According to STR, Boston’s revenue per available room (RevPAR) finished 2021 at roughly half the pre-pandemic 2019 level, a discouraging performance. But the city took a leap forward in 2022 and is on pace to finish the year with a RevPAR level just a shade below the pre-pandemic performance. After adjusting for inflation, these results are less significant, of course, but the turnaround still represents a huge achievement, particularly considering that the recovery is still in progress for the international travel, corporate transient, and convention demand channels. As illustrated in the charts below, the market’s RevPAR returned to its historical position among the top 25 markets, with the year-to-date October 2022 RevPAR equating to 128% of the top 25 markets’ average. Among the top 25 markets in the country, Boston reported the fifth-highest RevPAR level through year-to-date October 2022, behind only New York City, Oahu, Miami, and San Diego, and ahead of San Francisco and Los Angeles.
Group business is coming back strong, partly due to virtual events’ inability to capture the magic of IRL experiences. Studies show that group-lodging demand has rebounded this year, and group business in 2023 is expected to outperform 2019. According to HotelAVE, demand should bounce back to pre-pandemic levels next year, and a 5 percent increase in group rate will push the performance past the 2019 mark.
New Orleans’ hotel sector, which has historically been almost exclusively reliant on leisure and group business, including large numbers of international visitors, was hit especially hard in the early stages of the COVID-19 pandemic.
While there was a lot of political debate over the past few months about whether two consecutive quarters of negative GDP growth — a common definition for a recession — in the first six months of 2022 constituted a recession or not, the U.S. hotel industry did not realize a recession by any measure. Hotel companies are seeing demand rise above pre-pandemic levels, and ADRs are at record highs. This is fueling unrealistic optimism for hotel revenues in 2023 and contributing to a familiar industry habit of thinking that strong current revenue performance will continue into next year.
The big picture: The latest U.S. Travel forecast is relatively unchanged from our previous estimates from the spring, despite the increased odds of a recession, stubborn inflation and additional headwinds.
This morning, the Bureau of Labor Statistics (BLS) released the latest employment data, which surpassed expectations and showed that the economy added 263,000 jobs in November. This is worrying investors who fear that the Federal Reserve will respond to a still-hot jobs market with even more aggressive interest rate hikes.
Effective January 1, 2024, companies will have to report their beneficial owners to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network as part of the updated Corporate Transparency Act of 2021 (CTA) rules. Unless they are exempt under the CTA, businesses that fail to submit this information may be faced with steep civil or criminal penalties. Vince Farhat and Alan Azar of JMBM’s White Collar Defense and Investigations Group have written an article explaining CTA’s new reporting requirements and how to comply with them below.
Amadeus, a global leader in travel technology, with its unique ability to track forward-looking hotel occupancy in major markets around the world, is seeing a positive trend in U.S. hotel bookings for the Thanksgiving holiday. Amadeus’ Demand360® business intelligence data shows that as of November 3, 2022, U.S. occupancy for Thanksgiving week is at 29%, pacing 1% higher than 2019 (pre-pandemic) levels.
The big picture: The latest jobs data shows that Leisure & Hospitality (L&H) jobs continued to grow, but nowhere near what is needed for industry growth or to fill the large, and growing, number of openings.
CBRE Hotels Research specializes in translating national and local economic conditions into measures of hospitality market and property-level financial performance now and into the future.
Economists, politicians, and business leaders are split on whether the U.S. economy is heading for a recession, is already in one, or will merely experience a slowdown. With continued supply chain disruptions, geopolitical conflicts (most notably the war in Ukraine), and the Fed’s determination to continue increasing the federal funds interest rate, there is tremendous uncertainty around inflation and where the economy is heading. Mixed signals abound, however U.S. gross domestic product (GDP) increased for the first time this year in the third quarter, expanding at a higher-than-expected 2.6 percent annually. Unemployment remains low, wage increases are strong and while growth and earnings are slowing, most consumers and corporations are in good financial condition with healthy underlying credit.
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