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New Supply, Strong Economy Boost U.S. Hotel Forecast for 2019
New hotel rooms coming onto the U.S. market are not expected to be a concern for established hotel operators because demand will continue to exceed moderating new-supply levels through 2019. A new Hotel Horizons forecast report from CBRE Hotels’ Americas Research forecasts that supply will peak at a 2% gain in 2018, and then stabilize at the long-run average of 1.9% for the next two years.
The report also shows the number of projects entering all phases of the development pipeline is declining.
CBRE Hotels’ Consulting’s Bruce Baltin says, “All indicators point to the strength of the Los Angeles hotel market. Demand is keeping up with supply growth, and occupancy levels remain good by local and national standards.”
The Greater Los Angeles region is among the top-performing markets. Average daily rates (ADR) at hotels in the area have continued to rise year-over-year, and are expected to climb 3.1% for 2018 from $181.56 in 2017. Next year, average room rates are expected to increase an additional 2.7% to $186.54, above the expected average nationwide rise of 2.6%.
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