California CRE News In Your Inbox.
Sign up for Connect emails to stay informed with CRE stories that are 150 words or less.
CBRE Predicts Worst is Behind SoCal Hotel Sector
The U.S. hotel industry is poised to begin a multiyear recovery in the third quarter. That prediction comes after the sector faced the lowest occupancy levels since the 1930s and the greatest declines in revenues and profits ever experienced in Q2 2020.
In the SoCal region, overall occupancy for this year is expected at 45% with average daily rates down more than 26% at $129.12, according to research by CBRE. Steady increases in demand are expected starting next year and eventually lead to an occupancy of 80.3% and an ADR of $186.82 in 2024.
Los Angeles-based CBRE Hotels Advisory’s Brandon Feighner says, “While the performance of the local hotel industry will be well below historical long-term averages, we believe the worst is now behind us in our region.”
He added, “Until a vaccine is available, hoteliers will be focused on local and regional demand rather than long-haul and international markets. As the national and local lodging industries recover, we anticipate that the Greater LA region will once again be one of the nation’s best-performing and attractive to developers and investors.”
CBRE predicts occupied room nights for hotels in the upper-midscale segment will return to 2019 levels in 2022, while luxury and upper-upscale demand will lag until 2024.
For comments, questions or concerns, please contact Dennis Kaiser
