CBRE Projects U.S. RevPAR Growth of 2% This Year

The DJIA plunged 749 points on Friday, while the Nasdaq was down 438, the S&P 500 fell 104 points, and the 10-year treasury yield was down .08 to 4.42%. Lodging stocks were lower. The two earnings names, SHO and RHP, were down -6% and -5%, respectively, while ABNB gave back -6% of their recent gains.

Ryman Hospitality reported a rare miss, attributing the shortfall to a leisure slowdown in the last two weeks of December. They also gave lower-than-expected guidance. 2025 will include renovations at Opryland, Texan, and the Palms. The Gaylord Pacific Resort and Convention Center will have its grand opening on May 15. The $1.3 billion Chula Vista, California property will be the largest hotel on the West Coast at 1,600 rooms and the sixth hotel under the Gaylord Hotels brand.

Sunstone Hotels reported a better-than-expected 4Q with in-line guidance for 2025. They bought back 100,000 shares in 4Q for $900,000. SHO said the Andaz Miami Beach is expected to reopen in the next few weeks after significant renovations, which is expected to add nearly four points of growth.

CBRE issued a forecast that RevPAR will continue to grow steadily in 2025 as urban locations continue to outperform due to improved group and business travel and continued recovery of inbound international travel. CBRE forecasts a 2.0% increase in RevPAR growth in 2025, with occupancy improving by 23 bps and ADR increasing by 1.6%. This projected growth indicates the continued recovery of the lodging industry, with RevPAR expected to be 16.6% higher in 2025 compared with pre-pandemic levels in 2019.  CBRE’s baseline forecast includes a 2.4% GDP growth rate and average inflation of 2.5% for 2025.  Given the typically strong correlation between GDP and RevPAR growth, the relative strength of the