New hotel rooms coming onto the U.S. market shouldn’t be a concern for established hotel operators, as demand will continue to exceed supply through 2019, according to CBRE Hotels’ Americas Research’s recently released September 2018 Hotel Horizons forecast report.
For New York City, CBRE Hotels Research is forecasting an 87.1 percent occupancy rate for the remainder of 2018 and a slightly lower 86.3 percent for 2019.
New York City’s hotel industry continues to show strong fundamentals, resulting in Revenue Per Available Room (RevPAR) increases of 3.5 percent and .8 percent forecasted for 2018 and for 2019, respectively.
In addition, the average daily rates (ADR), are forecast to increase by 2.9 percent overall this year and 1.8 percent in 2019.
“New York City continues to be the world’s go-to tourist and business destination and, as a result, the hotel market remains one of the strongest in the country,” said New York-based Mark VanStekelenburg of CBRE Hotels.
“Our forecasts show a projected increase in both supply and demand throughout 2019, which is on par with the positive economic and tourism outlook.”
Nationally, CBRE Hotels Research forecasts that supply will peak at a 2.0 percent gain in 2018 and then stabilize at the long-run average of 1.9 percent for the next two years.
Further, the number of projects entering all phases of the development pipeline is declining.
“Now more than ever it is important for owners and operators to understand their local hotel market conditions and local economies when preparing their budgets for 2019,” said R. Mark Woodworth, senior managing director of CBRE Hotels’ Americas Research.
“It is easy to be enthusiastically mesmerized by the positive outlook for the nationwide lodging market. However, don’t be caught off guard by not understanding what is happening in your neighborhood.
“It is very evident that local economic conditions, as well as changes to the local lodging supply, are going to significantly impact the performance of U.S. hotels in 2019.”