logo redirect pin user minus plus fax mobile-phone office-phone data envelope globe outlook retail close line-arrow-down solid-triangle-down facebook globe2 google hamburger line-arrow-left solid-triangle-left linkedin wechat play-btn line-arrow-right arrow-right solid-triangle-right search twitter line-arrow-up solid-triangle-up calendar globe-americas globe-apac globe-emea external-link music picture paper pictures play gallery download rss-feed vcard account-loading collection external-link2 internal-link share-link icon-close2
United States
  • Global
  • United States
  • Angola
  • Argentina
  • Australia
  • Austria
  • Bahrain
  • Baltics
  • Belgium
  • Brazil
  • Bulgaria
  • Cambodia
  • Canada
  • Chile
  • Colombia
  • Czech Republic
  • Denmark
  • Egypt
  • Finland
  • France
  • Germany
  • Greece
  • Hong Kong
  • Hungary
  • India
  • Indonesia
  • Ireland
  • Israel
  • Italy
  • Japan
  • Jordan
  • Kazakhstan
  • Kenya
  • Korea
  • Kuwait
  • Latin America
  • Luxembourg
  • Mainland China
  • Malaysia
  • Mexico
  • Morocco
  • Netherlands
  • New Zealand
  • Norway
  • Oman
  • Pakistan
  • Panama
  • Peru
  • Philippines
  • Poland
  • Portugal
  • Romania
  • Russia
  • Saudi Arabia
  • Singapore
  • Slovakia
  • South Eastern Europe
  • Spain
  • Sweden
  • Switzerland
  • Taiwan
  • Thailand
  • Turkey
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • Venezuela
  • Vietnam
Log In
  • Global Intranet
  • myCBRE
  • Services
    • Business Segments

      Advisory Services

      Global Workplace Solutions

      Real Estate Investments

      • Advisory & Transaction Services
      • Capital Markets
      • Project Management
      • Property Management
      • Valuation & Advisory Services
      • Advisory & Transaction Services | Occupier
      • Client Strategy and Consulting
      • Facilities Management
      • Project Management
      • Development Services (Trammell Crow Company)
      • Flexible Space Solutions (Hana)
      • Investment Management (CBRE Global Investors)
    • Services for Investors
      • Appraisal Management
      • Debt and Loan Valuation
      • Federal Government Leases
      • Leasing & Advisory
      • Litigation Support
      • Net Lease Properties
      • Small Balance Lending
      • Corporate Capital Markets
      • Debt & Structured Finance
      • Going Concern Valuation
      • Investment Accounting & Reporting Solutions
      • Loan Portfolio Sales
      • Property Management
      • Telecom Advisory
      • Construction Risk Management
      • Energy & Sustainability
      • Host
      • Investment Banking
      • Loan Servicing
      • Property Sales
      • Valuations for Financial & Tax Reporting
    • Services for Occupiers
      • Business Transition & Move Management
      • Energy & Sustainability
      • Host
      • Location Analytics
      • Portfolio Services
      • Space Enablement
      • Client Strategy and Consulting
      • Expense Management Solutions
      • Labor Analytics
      • Location Incentives
      • Project Management
      • Workplace
      • Corporate Capital Markets
      • Facilities Management
      • Leasing & Advisory
      • Network Advisory
      • Real Estate Accounting
    • Asset Types & Specialties
      • Office
      • Aerospace and Defense
      • Data Centers
      • Golf & Resorts
      • Multifamily
      • Parking
      • Industrial & Logistics
      • Affordable Housing
      • Hotels
      • Land
      • Nonprofit
      • Self-Storage
      • Retail
      • Aviation Properties
      • Gaming
      • Manufactured Housing
      • Omnichannel
      • Senior Housing
    • Industry Sectors
      • Industrial & Logistics
      • Energy, Oil & Gas
      • Law Firms
      • Technology, Media & Telecom
      • Retail
      • Financial Services
      • Life Sciences
      • Data Centers
      • Healthcare
      • Student Housing & Education
  • Properties
  • Research & Insight
    • Latest National Research & Reports
      The Way Forward
      Weekly Insights
      Reopening the World's Workplaces
      COVID Resource Center
  • People & Offices
  • About CBRE
    • Careers
      Case Studies
      Corporate Information
      Corporate Responsibility
      Executive Leadership - Global
      Investor Relations
      Media Center
      Suppliers

Next

Press Release
CBRE Recognized for Real Estate Industry’s "Best Use of Automation" by Realcomm
  • About CBRE
  • Media Center
  • CBRE Research Forecasts Healthy RevPar Growth for Houston Hotels by 2020

CBRE Research Forecasts Healthy RevPar Growth for Houston Hotels by 2020

Houston, TX | April 15, 2019
  • Email
  • Share
  • Tweet
  • Share

CBRE Micro 608x436

A strong Texas economy is projected to stabilize in 2019 and position the Houston hotel market for continued revenue per available room (RevPAR) growth over the next few years, according to the latest forecast from CBRE Hotels Americas Research. Houston hotels finished 2018 with a RevPAR loss of 7.4 percent predominantly due to a large increase in demand from Hurricane Harvey in 2017. Now with more traditional fundamentals, CBRE research predicts a 0.3 percent growth in RevPAR for 2019 and a 3.0 percent increase in 2020.  

“The average daily rate (ADR) is the key fundamental for both the U.S and Houston market. The projected increases in ADR are at or above inflationary increases, causing RevPAR to show positive trends in the coming years,” said Jeff Binford, CBRE Hotels South-Central Managing Director. “The increase in supply slowed slightly in 2018 but is expected to increase in 2019 for a short period. While demand is projected to remain relatively strong, the slightly larger increase in supply is projected to result in a slightly lower occupancy of 62.5% for 2019.”

CBRE Research shows 161 hotels in the development pipeline from planning to construction. 36 of those are under constructions with an estimated 4,043 rooms. 

National
Continued favorable economic fundamentals are expected to lead to U.S. hotel rooms RevPAR growth of 2.5 percent in 2019 and 2.0 percent in 2020.

“Supply, demand and pricing in the U.S. lodging industry are very similar to what we have observed the past few years,” said R. Mark Woodworth, senior managing director of CBRE Hotels Americas Research.  “For the most part, we expect the supply of hotel rooms entering the market to be absorbed by newly generated demand buoyed by a healthy economy.  Further, while the nominal rate of change will be modest, we are projecting average daily rate (ADR) growth above the pace of inflation for 2019 and 2020.”

Hotel demand is strongly correlated with GDP growth. With economic activity in the U.S. expected to slow in the next two years, CBRE Hotels Americas Research is projecting RevPar to decline slightly (0.6 percent) in 2021 before recovering (up 1.4 percent) in 2022. RevPAR is expected to decline across all chain-scales during the slowdown, but some will be impacted more than others.

CBRE Hotels Americas Research expects the 2021 RevPAR decline for the bottom three chain-scales, the most sensitive to changes in employment, to average 1.3 percent. Meanwhile, CBRE expects the RevPAR falloff for upper-priced properties to average just 0.8 percent.

“We view the performance of the U.S. lodging industry in 2021as a slowdown, not a recession,” Woodworth said.  “In fact, we see U.S. hotel demand bouncing back strong in 2022.”

Despite the anticipated slowdown, overall hotel occupancy is forecast to average almost 300 basis points more than the long-term average through 2023.  However, ADR growth will fall below inflation in 2021 and 2022.

“Several factors have muted ADR growth the past few years, including low inflation, increasing competition from non-traditional forms of lodging and the intervention of intermediary sales channels,” said John B. (Jack) Corgel, Ph.D., professor of real estate at the Cornell University School of Hotel Administration and senior advisor to CBRE Hotels Americas Research.

“In addition, several macro factors, the 2008-09 banking crisis, European debt defaults, Brexit and U.S. government shutdowns, have made travelers feel uneasy,” Corgel explained. “This has resulted in shorter booking times, a decline in non-essential travel and enhanced price-sensitivity. We believe U.S. average daily rates are roughly 0.5 percent lower than they would be without these elevated levels of uncertainty.”
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 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated 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.

Media Contact

  • Corporate Information
  • Corporate Responsibility
  • Case Studies
  • Media Center
  • About Us
  • Careers
  • People and Offices
  • Global Leadership
  • Investor Relations
  • Contact Us
  • Global Web Privacy and Cookie Policy
  • Sitemap
  • Terms of Use
  • United States Privacy Policy
  • Our Response to SCHREMS II
  • Twitter
  • Facebook
  • LinkedIn