Hotel Recovery Strong; Will It Continue in Coming Quarters? by CBRE Econometric Advisors
The current demand recovery of the hotel sector is unlike anything that has occurred in the past 30 years of tracking this market sector, according to Abigail Rosenbaum, senior economist, CBRE Econometric Advisors (CBRE EA), a real estate analysis and forecasting group within CBRE. CBRE EA’s traditional hotel forecasting model, using employment as the main driver of hotel demand, indicates that there should be a pause in demand in the coming quarters because hotel demand has grown too rapidly.
Rosenbaum noted that following the 2001 recession, there was a more severe drop in hotel demand than after the Great Recession of 2008/2009. The hotel recovery after the 2001 recession only yielded demand growth as high as seven percent. Perhaps after the Great Recession, there was pent up demand, which would explain the continued strength of the demand recovery two years later.
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