UTILIZATION IN MAJOR MARKETS INCHES UP WHILE VACANCIES REMAIN

MILLIONS OF DOLLARS FLOW INTO LAND MARKET IN THE METAVERSE

LUXURY BRANDS AIM TO STRENGTHEN THROUGH 2020S

KEY HOSPITALITY METRICS ALL TICK UP IN 1Q2022

The arrival of COVID-19 to the U . S . in early 2020 pulled the floor out of the office market , with worker utilization rates dropping from above 90 percent to below 20 percent . But now , according to Kastle System ’ s Workplace Occupancy Barometer , that figure has topped 40 percent for the first time since the pandemic . But the recovery for office remains a bit muddied , with vacancy rates remaining relatively steady in the past two years .

According to commentary from Moody ’ s Analytics , metros with higher work-from-home percentages experienced higher vacancy increases from the end of 2019 to the end of 2021 . As workers return to offices , the report states , tenants may significantly reduce space if many are only partially working in person . Tenants who expect employees to return to the office , meanwhile , may retain space , but these workforces have yet to come back in a major way .

Land has long been considered a finite resource , but new digital frontiers might mean new horizons for commercial real estate . The metaverse is attracting hundreds of millions of dollars in land buys . CNBC estimates more than $ 500 million in sales in 2021 , with that figure expected to top $ 1 billion this year .

Earlier this year , Metaverse Group spent the cryptocurrency equivalent of $ 2.43 million on a tract of land in Decentraland , an online , virtual-only environment . According to Connect CRE , large corporate buyers are investing six and seven figures in these “ properties ,” with purchasers including PricewaterhouseCoopers , HBSC , and Adidas .

While the transactions refer to mortgages and land rights , some analysts frame them as closer to cryptocurrency than traditional land investments , according to Business Insider . Corporations may be looking to get into the metaverse to build brand awareness .

After global luxury brands weathered a difficult 2020 , with fashion markets falling by 12.6 percent , or $ 28 billion , total sales of luxury fashion goods topped 2019 levels by $ 6.7 billion in 2021 and $ 15.6 billion in 2022 , according to Colliers . The U . S . rang up a total of $ 63.3 billion in 2021 , compared to $ 53.6 billion in 2020 and $ 64.5 billion in 2019 .

China ’ s growth in consumer spending will mean a boost in demand for luxury brands — including Chanel , Estée Lauder , and prominent jewelers — with the Asian giant ’ s piece of the global market increasing from 18.9 percent in 2019 to 25.1 percent in 2024 . Japan will have the second largest bump in consumption in that time frame , increasing 4.5 percent to 22 percent of the world ’ s total . But the sector will face challenges as many consumers may start to opt for experiences over products . Customer expectations are also evolving , with some people developing preferences for casual clothing over more formal products .

As an entire sector in 1Q2022 , hospitality saw improvement across all major metrics in yearover-year measurements , with mixed results when compared to the first quarter of 2019 , before the impact of COVID-19 . In year-over-year figures , demand rose 17.2 percent , supply improved by 1.1 percent , occupancy jumped 15.9 percent , average daily rate increased 39.1 percent , and RevPAR increased by 61.3 percent . Compared to 2019 , though , demand was down 11 percent , occupancy was lagging 14.2 percent , and RevPAR declined 9.9 percent . ADR was the only major metric to improve since COVID-19 , increasing 5 percent from 1Q2019 to 1Q2022 .

All major hotel chain sectors saw improved ADR compared to pre-pandemic levels . Midscale and economy chains saw the biggest improvement , up 11 percent , followed by upper midscale ( 10 percent ), upper upscale ( 9 percent ), luxury ( 6 percent ), and upscale ( 5 percent ).

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