Hospitality Midwest

CBRE: The hotel business keeps booming

CBRE: The hotel business keeps booming,ph01
Tru by Hilton in St. Louis.

The hotel business has been a profitable one so far this year, and operators should expect more of the same throughout 2018.

CBRE Hotels Americas Research is forecasting a 2.8 percent increase in revenue per available room – better known as RevPAR – for U.S. hotels in 2018.

CBRE is even more bullish on the U.S. hotel sector now than the company was in its March Hotel Horizons report. In that report, CBRE forecast an increase in RevPAR of 2.5 percent. CBRE revised its forecast after global analytics firm STR reported that U.S. hotels saw a 3.5 percent increase in RevPAR during the first quarter of 2018.

Midwest hotels should see a big gain, too. As an example, look at Columbus, Ohio.

CBRE expects the Columbus region to see a 2.6 percent increase in RevPAR in 2018. CBRE also forecasts that hotel occupancy in the region should jump to 66.2 percent.

More hotels will be entering this market, too, with CBRE forecasting supply growth of 7.4 percent in 2018 and 2019. That woud rank as the largest two-year change in hotel space here since 2001 and 2002, when the supply jumped 12.1 percent.

“We continue to be impressed by the ability of the U.S. economy to support demand growth for accommodations away from home,” said R. Mark Woodworth, senior managing director of CBRE Hotels’ Americas Research.

Woodworth said that U.S. lodging demand grew at 3 percent during the first quarter of 2018, 1.1 percentage points greater than expected. This now makes 33 consecutive quarters in which demand for hotel space grew, a streat that started in the first quarter of 2010.