CBRE Forecasts Enhanced RevPAR Growth in 2023 Despite Economic Headwinds

Written by: Rachael Rothman and Matt Mowell

Irrespective of projections of persistent inflation and a moderate economic economic downturn, CBRE’s November 2022 Resort Horizons® forecast phone calls for a 5.8 percent raise in rooms revenue for each offered space (RevPAR) in 2023. This is up from CBRE’s earlier forecast of a 5.6 p.c maximize in RevPAR for 2023.

Propelling CBRE’s improved outlook for RevPAR is an anticipated 4.2 percent rise in normal everyday price (ADR), pushed in portion by the continuation of above prolonged-run common inflation. For 2023, CBRE is forecasting the Shopper Price tag Index in the U.S. to enhance by 3.5 % Y-o-Y. Inflation proceeds to have a blended influence on the lodge industry, bolstering best-line expansion even though pressuring margins.

Offer and Demand from customers

Inflation is also impacting improvement action. The mix of mounting construction material prices, a tight labor market, and significant desire prices will provide to continue to keep source advancement over the up coming 5 many years 40 percent decreased than historical tendencies. Instead of construction, we count on funds flows in the near term to be targeted on financial debt reductions, renovations and remodels offered the backlog of Capex that built up in the course of the pandemic.

Given its forecast for a .2 % decline in 2023 gross domestic item (GDP), CBRE lowered its expectations for need advancement from 3.3 p.c in their August 2022 forecasts to 2.9 p.c in the November update. With the projected offer increase remaining at 1.2 per cent for 2023, the web outcome is a reduction in CBRE’s occupancy growth estimate for the year to 1.6 percent, down from the 2. per cent improve earlier forecast. The reducing of occupancy anticipations will considerably offset the increased outlook for ADR growth.

It is well worth noting that the 5.8 per cent RevPAR progress forecast for 2023 is entrance-finish loaded, specially in the initially quarter of the yr provided the uncomplicated comparisons produced by the outbreak of the Omicron variant in early 2022. Our RevPAR forecast for the first quarter of 2023 phone calls for a 15.6 p.c attain, followed by 2-4 percent growth about the equilibrium of the calendar year.

Chain Scales

By the close of 2023, CBRE forecasts all chain scales to have surpassed their respective 2019 RevPAR stages. Overall economy and midscale motels recovered to 2019 concentrations in 2021. Closures, higher rents and displacements from shelters will proceed to change persons from homes and apartments to decreased-priced hotels featuring weekly and regular premiums.

Luxury and upper-upscale homes have lagged in recovery for the reason that of their dependence on particular person corporate and group desire. Lodges that run in these segments will not accomplish RevPAR recovery right up until the conclusion of 2023.


CBRE prepares Resort Horizons® forecasts for 65 of the biggest marketplaces in the U.S. By calendar year-conclude 2023, 53 of the 65 Horizons® markets are expected to have arrived at, or surpassed, their 2019 RevPAR stages. That leaves 12 additional to get well in 2024 or beyond. The greater part of marketplaces lagging in restoration are in northern California, the higher-Midwest, and together the northeast corridor from Washington, D.C. by means of New York.

At the other finish of the spectrum, the leisure-centric places of Savannah, Miami, St. Petersburg and the Coachella Valley in California are forecast to exceed their 2019 RevPAR concentrations by more than 20 p.c in 2023.

The Overall economy

CBRE’s Lodge Horizons® forecasts are centered on economic assumptions prepared by CBRE Econometric Advisors (CBRE EA). As of October 2022, CBRE EA predicted the following for the U.S. overall economy in 2023.

A Economic downturn

CBRE EA anticipates that a moderate economic downturn will past through the 1st 50 % of 2023 for the pursuing motives:

  • The key result in of this downturn is the Fed’s aggressive level hikes delivering its intended results.
  • Better household financial debt fees are weighing on usage of big-ticket things, this kind of as housing and reportedly autos.
  • A powerful USD will impede exports.
  • Better company charge of money is forcing corporations to shelve enlargement programs and layoff bulletins are increasing. This will soften the labor market place via a slipping occupation openings amount in the in close proximity to time period, and the unemployment amount ought to improve to 5 % by 2024.


The pace of yearly inflation very likely peaked during the summer of 2022. Going into autumn, easing commodity and shopper goods prices are weighing on CPI. The most significant component of CPI—housing—is also peaking. Some monthly facts points propose that equally rental and for-sale charges are falling. Nevertheless, the Fed continues to be vigilant about soaring products and services prices and the prospect of embedded inflation. This ought to hold the Fed Money Rate trending upward by means of mid-2023 and peaking north of 4.5 per cent. Indeed, this outlook is predicated on inflation decelerating to 3.5 per cent by calendar year-stop 2023. It is completely plausible that inflation could stay stubbornly substantial, which would result in a stronger reaction from the Fed and a far more unpleasant recession.

It should really be pointed out that the CBRE lodging forecasts introduced in this article do not contemplate a world wide war, a pervasive recession or a far more acute COVID variant.

This write-up was originally published in the January 2023 version of Lodging and has been shared on HFTP Link for the benefit of HFTP lodge finance members.

Rachael Rothman is head of CBRE Inns Investigate and Info Analytics. Matt Mowell is senior economist at CBRE Econometric Advisors. To get hold of CBRE’s Resort Horizons® forecast reports, be sure to go to This report was published in the January 2023 edition of Lodging.

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