INVESTMENT
THE NEW
NORM
FOR THE WAY AHEAD
Contributed by TIM DICK , PHD , MAI , CRE AT CBRE HOTEL ADVISORY AND ASSET MANAGEMENT , AND SHIV HIRA , CBRE HOTELS ADVISORY , ATLANTA , GEORGIA
As hotel operators and owners prepare for 2022 and beyond , numerous questions come to mind . How will the lodging sector perform during the 4th quarter of 2021 ? Will there continue to be operational , financial and investment challenges during 2022 ? What will drive those challenges and how will the lodging industry face and perform against those challenges ?
As many in the industry have witnessed , hotels remain resilient throughout economic cycles . Savvy managers and owners are adept in meeting operational and financial challenges .
As the 2022 budget season progresses , CBRE ’ s Hotels Advisory professionals surveyed 130 industry leaders around the U . S . regarding concerns facing the hotel industry . A particularly insightful metric examines at what point the hotel industry will return to pre-pandemic performance levels . The broad spectrum of hotels ( geographic location , chain scale positioning , branding / non-branding , age of the hotel , market orientation ) all present challenges in determining the return to 2019 levels of operation . This is most likely due to the influence that each of these factors possesses in determining market and hotel performance . Nonetheless , we set out to ask hoteliers , “ When do you think your hotel ( s ) will return to pre-pandemic levels , most notably the 2019 levels of performance ?” When asked this question , nearly 75 % of the respondents indicated either 2023 or 2024 , with most indicating 2023 .
This is particularly interesting , as the CBRE national economists have indicated that based on the anticipated growth in gross domestic product ( GDP ), anticipated employment and unemployment levels ,
78 hotelsmag . com November / December 2021