WASHINGTON, DC—The outlook for the U.S. lodging industry, particularly historic hotels, continues to be strong, according to CBRE Hotels’ Americas Research (CBRE).
For the third consecutive year, CBRE Hotels’ Americas Research presented a Historic Hotels of America – CBRE five-year forecast at the Historic Hotels of America annual conference. CBRE relies on historical hotel performance data from STR and economic forecasts from CBRE Econometric Advisors to prepare its lodging forecasts.
Key points presented by Mark Woodworth, senior managing director at CBRE, to industry leaders at the Historic Hotels of America annual conference at The Royal Hawaiian, A Luxury Collection Resort in November 2016 include the following:
• Per STR, through the first three-quarters of 2016, the aggregate RevPAR for historic hotels that are members of Historic Hotels of America placed between the national averages for all upper-upscale and all luxury hotels in the U.S.
• Over the next five years, RevPAR for historic hotels is expected to grow at a compound average annual rate of 2.7%, which is greater than the RevPAR forecasts for the nation’s upper-upscale hotels at 2.0% and 1.7% for luxury hotels. Most of the RevPAR growth is expected to stem from increases in ADR.
• Annual occupancy levels for hotels that are members of Historic Hotels of America remains eight to 10 percentage points above the national average occupancy level through 2020.
• Based on a set of information pulled from CBRE’s database of hotel operating statements, historic hotels—including those that are not members of Historic Hotels of America—had an average ADR of $256.11, higher by more than 11.6% than the $229.59 ADR for contemporary hotels. (See chart.)
• Historic hotel revenue has recovered fully from the 2007 downturn while comparable contemporary hotels are still lagging in revenue recovery.
“The data strongly supports the idea that many consumers favor and will pay more for the unique hotel experience historic properties can offer,” noted Woodworth.
“Historic Hotels of America helps the consumer differentiate the authentic historic hotel from other older hotels,” said Lawrence Horwitz, executive director, Historic Hotels of America and Historic Hotels Worldwide. “For the third year in a row, historic hotels inducted into and participating in Historic Hotels of America realize a competitive advantage as well as a substantial premium with their rates, occupancy and RevPAR compared to other hotels.”