Hotel Supply Growth May Not Be as Fast as in the Past
Skift Take
- Stock Market Performance: DJIA fell by 291 points, Nasdaq decreased by 158 points, and S&P 500 dropped by 34 points. The 10-year treasury yield increased to 4.31%.
- Lodging Industry Trends: Lodging stocks, including SLNA and BHR, traded lower. Truist held a conference call on US lodging supply growth, with Marriott having the largest pipeline, and Hyatt showing the largest year-over-year increase.
- Hotel Performance Forecasts: CBRE Hotels revised down its 2023 RevPAR forecast due to weak summer demand, expecting a 4.6% YoY growth in RevPAR. Hotel supply growth is projected to be 1%, below the industry's historical average of 1.6% over the next five years.
The DJIA fell 291 points while Nasdaq was down 158, the S&P 500 fell 34 points, and the 10-year treasury yield was up another .05 to 4.31%. Lodging stocks were lower. SLNA traded down to an all-time low, down -12%. Also hitting another new low was BHR.
Truist held a conference call with JP Ford of Lodging Econometrics. They see steady year-over-year growth in supply in the US through 2025, with Marriott having the largest pipeline of rooms in the US. Hyatt has seen the largest year-over-year increase. LE said the US supply is expected to grow 1.4% y/y in 2023, 1.4% in 2024, and 1.5% in 2025. Luxury room growth is projected to be 2% in 2023 and 2024, slowing to 0.9% in 2025, with Upscale and Upper Midscale projected to grow 2% through 2025. Globally Asia Pacific continues to dominate supply growth, with 1.08 million rooms in the total pipeline versus 600K for the US. LE expects the sluggish transaction en
