Research - SEPTEMBER 7, 2016

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Hotel markets coming into balance as demand and supply growth rates converge

by Andrea Waitrovich

The hotel market had a sluggish start during the first half of the year, according to CBRE Hotels’ Americas Research.

The magnitude of change in the major industry indicators is not pleasing U.S. hotel owners and operators.  New development activity continues to accelerate, while growth in average daily room rates (ADR) has decelerated.

“On the one hand, we are comforted by the continual growth in accommodated demand.  After all, if people stop traveling, nothing else really matters,” said R. Mark Woodworth, senior managing director of CBRE Hotels’ Americas Research. “On the other hand, there continues to be a disconnect between the record occupancy levels and the inability of hoteliers to increase room rates.”

According to STR, U.S. lodging demand increased by 1.6 percent during the first half of 2016 compared to the first half of 2015.  At the same time, hotel rooms supply rose by just 1.5 percent,

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