Source: CBRE Hotels

Economy:

  • Current Trends Food for Thought CBRE calls for a mild recession in 2023. GDP is expected to decline 0.2% in 2023 but rebound in 2024 to 1.9%.
  • Unemployment remains low but is expected to increase. Hotel job openings remain 44% above pre-pandemic levels likely leading to further wage pressures.
  • CBRE expects higher and more persistent inflation. Inflation is expected to remain above the long-run average of 2.8% through 2023. 

Current Trends:

  • Relative to 2019, RevPAR reaccelerated in September. Most chain scales and location types experienced post-pandemic highs.
  • No signs of softening October MTD. TSA throughput and Google searches for future business and leisure travel continue to improve.
  • Group, GDS, and brand.com are gaining share. OTA trends are at 100% of 2019 while brand.com remains 8% above pre-pandemic levels.

Food for Thought:

  • GDP growth and RevPAR growth are closely aligned. A decline in GDP is likely to result in a pullback in RevPAR growth in 2023.
  • Credit spreads have widened since before the pandemic. 10-year treasury yields increased 176 bps, and credit spreads widened 224 bps, on average.
  • The inflationary environment is leading to margin pressures. August GOP margins declined 141 bps year over year.

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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 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of 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.

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