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THE U.S. HOTEL construction pipeline continued its growth at the end of the second quarter of 2022 as travel returned, according to Lodging Econometrics. The upscale and upper-midscale segments continue to lead the pipeline with 68 percent of projects. The total U.S. construction pipeline stands at 5,220 projects with 621,268 rooms during the second quarter. That is up 9 percent by projects and 4 percent by rooms, over the same period last year, according to the U.S. Construction Pipeline Trend Report from LE. There were 965 projects with 130,914 rooms currently under construction in the second quarter, down 17 percent by projects and 18 percent by rooms, year-over-year. As many as 2,009 projects with 232,163 rooms are scheduled to start in the next 12 months, up 9 percent by projects and 9 percent by rooms, over last year. According to the report, projects and rooms in early planning reached a record high at 2,246 projects with 258,191 rooms, up 26 percent by projects and 15 percent by rooms, compared to last year. "Improved demand and increased consumer sentiment and spending has led to record-high rates of travel and much improved hotel revenue over the last few months. The outlook for the industry is positive and growth is expected to continue throughout 2022, albeit at a decelerated pace than initially expected. The industry's ability to adapt to the constantly changing economic environment provides a positive outlook for hotel performance, and its eventual full recovery," the report said.

GOPPAR FOR U.S. hotels dropped in July but once again exceeded 2019 levels for the fourth consecutive month, according to STR. The summer peak still brought an increase in demand, but the cost of ramping up to meet that demand cut into profit margins. GOPPAR was $78.30 for the month, down from $91.23 reported in June. It was $88.63 in May and stood at $90.96 in April. EBITDA PAR was $55.29 for July, TRevPAR was $209.66 and labor costs per room were $67.27. "While each of the key bottom-line metrics decreased slightly from June on a per-available-room basis, total profits increased with peak summer room demand and revenues," said Raquel Ortiz, STR's director of financial performance. "Profit margins were stronger than July 2019 for both full- and limited-service hotels, but GOP margins were at lower levels than the previous four months. The dip in margins can be attributed to higher expenses associated with more ramped-up operations as well as the general rise in costs around the country. Rising wages are being somewhat balanced by hotels using more contract labor and reducing benefits costs."

DRIVEN BY STRONGER-than-expected demand and moderate supply, CBRE has raised its forecast for hotel performance again this year, resulting in increased occupancy. CBRE revised its forecast for 2023 RevPAR to $97.89, up 6 percent year-over-year and an increase of $0.43 rise from the previous forecast. This positive revision is based on a 65-basis-point increase in expected occupancy compared to the previous forecast issued in February, CBRE said in a statement. Furthermore, the ADR is projected to grow by 3.7 percent in 2023, slightly lower than the previous forecast of 4.2 percent. According to CBRE Hotels Research, this is primarily due to slightly lower inflation expectations and a higher proportion of group travel and shoulder-period demand, which typically have lower rates. CBRE's baseline scenario forecast envisages an average GDP growth of 0.8 percent and average inflation of 4.6 percent in 2023. Given the strong correlation between GDP and RevPAR growth, changes in the economic outlook will directly impact the performance of the lodging industry, CBRE noted. "We are already starting to see signs that the easing of travel restrictions in Japan and China, combined with continued improvements in group and independent business demand, are bolstering demand heading into the heavy summer travel season," said Rachael Rothman, head of hotel research & data analytics at CBRE.

OCCUPANCY AND ADR in U.S. hotels will continue to grow in 2022, with a year-over-year rebound in RevPAR of 14.4 percent, around 93 percent of pre-pandemic levels, according to PwC. Meanwhile, ADR in the third and fourth quarter of 2022 is expected to surpass comparable 2019 levels. The near-term outlook for the U.S. lodging sector by PwC, titled U.S. Hospitality Directions: November 2021 has said that the vast majority of temporarily-closed hotels will have reopened and demand growth, particularly from individual business travelers and groups, will improve if infection rates continue to drop in 2022. According to PwC report, continued demand recovery will result in an occupancy of 61.7 percent next year and ADR will see an increase of 5.9 percent. The consultancy firm anticipates RevPAR up by 14.4 percent in 2022.

EXTENDED-STAY HOTEL room supply in the 100 largest metropolitan statistical areas in the U.S. grew 2.5 percent in 2022 compared to 2021, its smallest increase in several years, according to a new report from The Highland Group. The survey, which researched supply, demand, revenues and new construction of extended-stay hotels, said the outcome in 2022 was about half the net supply gain reported in 2021. According to the report, the lengthening hotel development timeline, fewer construction starts, disenfranchising hotels that no longer meet brand standards, conversions to apartments and some municipalities acquiring extended-stay hotels for housing have resulted in the muted growth. While there was a sharp decline in reported extended-stay rooms under construction last year compared to 2021, construction starts increased 6 percent over the last 12 months. "However, they remain low compared to the pre-pandemic period, the report noted. RevPAR growth in 2022 strongly favored ADR as opposed to occupancy gains in 2021. "Consequently, more than 40 MSAs reported lower average occupancy in 2022 than during the previous year. However, only a dozen MSAs have not yet recovered RevPAR back to its nominal 2019 value compared to about half the MSAs last year," it showed.

THE REVPAR RECOVERY of U.S. extended-stay hotels remain unchanged in August compared to July, according to consulting firm The Highland Group. However, ADR growth for mid-price and upscale segments decreased for the fifth consecutive month but remained higher than any other period before 2021. STR said that hotel occupancy gained 5.3 percent in August 2022 compared to same period last year, decreasing extended-stay hotel's occupancy premium to 12.6 percentage points compared to more than 14 points in August 2021. But the premium remains well within its long-term average range. Economy and mid-price extended-stay segments reported much faster ADR growth compared to corresponding segments during the month, according to the US Extended-Stay Hotels Bulletin: August 2022. The economy segment continued leading the RevPAR recovery compared to 2019, but demand declined 1.9 percent for the fifth consecutive month compared to August 2021 due to strong increases in ADR.

THE REVPAR OF hotels in Phoenix is forecasted to reach $419 for Super Bowl weekend of February 10-12, the second-highest level for the event, according to STR. As the city also hosts Phoenix Open this week, the Friday through Sunday night occupancy may touch 94 percent and ADR to hit $445. According to STR, a unique volume of demand would push occupancy slightly higher than Phoenix's last host year in 2015 (93.7 percent) even though supply increased by 11.7 percent this year. The ADR level would rank third among host markets behind Miami in 2020 and San Francisco in 2016. "Phoenix's jump in RevPAR during its last Super Bowl host year was staggering, and this time around will be no different with big-time growth contribution from both occupancy and ADR," said Isaac Collazo, STR's vice president of analytics. "Demand speaks for itself, especially with consumer behavior around the event free of pandemic concerns-unlike the last two Super Bowls. Phoenix's ADR situation has different influences than recent host markets given inflation and having less upper-tier supply than a Los Angeles or Miami." The overall Phoenix market comprises 544 hotels with 70,488 rooms.

WYNDHAM HOTELS & RESORTS and WaterWalk recently launched a new upscale brand, "WaterWalk Extended Stay by Wyndham." This deal will introduce up to 11 hotels with more than 1,500 rooms, initially in markets such as Tucson, Jacksonville, and Wichita. Pictured is the lobby of the WaterWalk by Wyndham - Phoenix. The new brand is Wyndham's 25th addition to its portfolio and will join the company's existing economy and mid-scale extended-stay brands, Wyndham said in a statement. "In the last year, guest demand for the extended stay segment reached record highs, which has been underscored by demand from owners and developers looking for new opportunities to partner with Wyndham," said Chip Ohlsson, Wyndham's chief development officer. "Our vision is to offer the industry's most robust portfolio of extended stay brands and the addition of WaterWalk marks an important step in that direction-helping ensure we have an offering in every segment, for every owner and for every guest." WaterWalk, founded by the late Jack DeBoer, currently runs 11 hotels in the U.S., the statement added. Newer hotels adopt the brand's Gen 2.0 prototype, focusing on efficient design and lower operating costs to increase profitability.

U.S. HOTEL PERFORMANCE dropped in the fourth week of October compared to the week before, according to STR. When compared to 2019, occupancy increased as a result of the Halloween calendar shift, as the holiday fell during the comparable week three years ago. STR reminded that in the first week of November performance metrics will show the negative side of that shift. Occupancy was 65.8 percent for the week ending Oct. 29, down from 69.9 percent the week before and up 5.2 percent from 2019. ADR was $152.94 during the week, dipped from $157.43 the week before and up 21.4 percent from three years ago. RevPAR reached $100.59 during the week, down from $110.11 the week before and up 27.8 percent from 2019. Among STR's top 25 markets, Tampa reported the largest increase in each of the key performance metrics: occupancy up 21.5 percent to 76.1 percent, ADR increased 42.1 percent to $158.38 and RevPAR improved 72.5 percent to $120.58, over 2019. Tampa has been one of the markets in Florida that have seen a performance lift associated with post-Hurricane Ian demand.

THE PROFITABILITY OF U.S. hotels was above 2019 level for the third consecutive month in May, but was lower compared to April, according to STR. The GOPPAR and EBITDA PAR levels were down in May compared to the month before. GOPPAR was $88.63 for the month, down from $90.96 reported in April. In March, GOPPAR stood at $83.81. EBITDA PAR was $67.80 for May, TRevPAR was $219.58 and labor costs per room were $66.27. "After the top-line metrics showed mixed results in May, it wasn't a surprise that the bottom-line metrics came in a bit lower," said Raquel Ortiz, director of financial performance, STR. "Regardless, each of the four key P&L metrics showed improvement when indexed to 2019, with GOPPAR and EBITDA PAR coming in higher than May 2019 levels. We continue to keep a close eye on F&B as group demand levels rise. F&B revenues are gradually moving closer to 2019 levels, but catering and banquet revenues continue to lag."

DESPITE PROJECTIONS OF persistent inflation and a moderate economic recession, CBRE's November 2022 Hotel Horizons forecast calls for a 5.8 percent increase in RevPAR in 2023. This is up from CBRE's previous forecast of a 5.6 percent increase in RevPAR for 2023. Propelling CBRE's increased outlook for RevPAR is an expected 4.2 percent rise in ADR, driven in part by the continuation of above long-run average inflation. For 2023, CBRE is forecasting the Consumer Price Index in the U.S. to increase by 3.5 percent year over year. Inflation continues to have a mixed impact on the hotel industry, bolstering top-line growth while pressuring margins. Supply and Demand Inflation is also impacting development activity. The combination of rising construction material costs, a tight labor market, and high interest rates will serve to keep supply growth over the next five years 40 percent lower than historical trends. Instead of construction, we expect cash flows in the near term to be focused on debt reductions, renovations and remodels given the backlog of Capex that built up during the pandemic. Given its forecast for a 0.2 percent decline in 2023 gross domestic product, CBRE lowered its expectations for demand growth from 3.3 percent in their August 2022 forecasts to 2.9 percent in the November update. With the projected supply increase remaining at 1.2 percent for 2023, the net result is a reduction in CBRE's occupancy growth estimate for the year to 1.6 percent, down from the 2 percent increase previously forecast. The lowering of occupancy expectations will somewhat offset the enhanced outlook for ADR growth.

U.S. HOTEL PERFORMANCE dipped in the first week of July when compared to the week before mainly due to decline in demand on account of the Independence Day holiday, according to STR. STR predicted that occupancy and demand are likely to fall again for a week before strengthening in the remaining weeks of July. Occupancy in the week before the holiday fell by more than four percentage points with most of the losses beginning on Wednesday and continuing into the weekend. Since 2000, the fourth of July holiday has fallen on a Monday seven times, including in 2021 and in 2016. Occupancy was 67.3 percent for the week ending July 2, down from 72.3 percent the week before and dropped 2.9 percent from 2019. ADR was $153.32 for the week, declined from $157.05 the week before and increased 19.7 percent from three years ago. RevPAR reached $103.24 during the week down from $113.55 the week before and up 23.1 percent from 2019.

THE BAIRD/STR HOTEL Stock Index rose again in April, continuing a trend the index has followed for the past four months. Investors' optimism is driven by the travel industry's ongoing recovery due to pent-up demand that is overriding negative influences, such as the Russia/Ukraine war and rising interest rates. Baird/STR went up 0.7 percent during the month, according to STR. The index rose 3.1 percent over the first four months of 2022. In March it increased 2.2 percent in March after rising 4.1 percent in February. The index also surpassed both the S&P 500, which dropped 8.8 percent in April, and the MSCI US REIT Index, which went down 4.6 percent. The hotel brand sub-index rose 0.5 percent from March, while the hotel REIT sub-index jumped up 1.5 percent.

ATLANTA-BASED BANYAN Investment Group, led by Rakesh Chauhan and Andy Chopra as managing partners, is rebranding as Satori Collective, an investment management firm focusing primarily on hotel property investment. Its subsidiary Banyan Tree Management also has become Aperture Hotels. Satori and Aperture will work independently of one another. The awakening Satori focuses on investment into select-service, upper select-service extended-stay and lifestyle hotel properties, according to the company. It concentrates on investment in growth corridors located in top MSAs across the U.S. which have established hotel demand generators such as tourism, corporate group travel, state capitals, conference universities, healthcare, heavy manufacturing and military. "Satori is a Buddhist term meaning 'awakening and deep understanding,' which is how our team approaches commercial real estate investment," Chopra said. "With more than 140 years of combined investment experience in virtually all markets and segments, our team has an unparalleled understanding of both the environment and the marketplace. We realized that our true, core business is real estate investment, so we have renewed and doubled our focus on raising and deploying capital in pursuit of consistent, risk adjusted returns while allowing our former management platform to stand on its own and pursue additional third-party management business opportunities."

GOPPAR FOR U.S. hotels in February exceeded the levels of the pre-pandemic comparable time period and was the highest since October 2022, according to STR's February 2023 Profit & Loss data. EBITDA was the only key bottom-line metric on a per-available-room basis to come in lower than February 2019, STR said in a statement. GOPPAR reached $77.37 for the month, up 1.6 percent over the same month in 2019, TRevPAR stood at $217.20, up 3.7 percent, and EBITDA PAR was $51.63, down 0.6 percent against February 2019. Labor costs were $73.70, a 2.9 percent increase. "The profit-and-loss metrics followed typical industry trends, improving from the prior month," said Raquel Ortiz, STR's director of financial performance. "Both GOPPAR and GOP margins were the highest since last fall, while profit margins came in just one percentage point below 2019. Profit margins for limited-service hotels are further behind in recovery than full service, likely due to increasing labor costs that bear heavier weight on the bottom line." "An increase in top-line group demand is beginning to show in the bottom line, as catering and banquet revenues are inching closer to 2019 levels and meeting space rentals and services charges surpassed that threshold. On a per-operating-room basis, nearly all F&B revenues outpaced the pre-pandemic comparables," Ortiz added. Of the major markets, 10 realized both GOPPAR and TRevPAR levels higher than the 2019 comparables, the statement said. "February was a slower month for markets that are more dependent on groups and conventions, such as Atlanta, San Francisco and Minneapolis," Ortiz further said. "Warmer markets have remained at the top, with Phoenix showing the highest TRevPAR recovery and second highest GOPPAR recovery for the month, helped by peak season and Super Bowl LVII."

AS THE HOLIDAY season dwindles into the past, so did U.S. hotels' performance, according to STR. Occupancy dropped, dragging ADR and RevPAR with it. Occupancy was 45.4 percent for the week ending Jan. 8, down from 54.3 percent the week before and down 14.9 percent from the comparable week in 2019. ADR was $119.92 for the week, down from $157.91 week over week and a 4.8 percent drop from 2019. RevPAR reached $54.47, a decline from $85.74 the prior week and down 19 percent from 2019. "Occupancy fell week over week because of a slowdown in leisure demand and a continued absence of business travel due to a Saturday holiday," STR said. "While ADR also dropped from an all-time high the previous week, the metric came in at roughly 95 percent of the 2019 comparable." Occupancy did not increase over 2019 levels for any of STR's top 25 markets, but Dallas came closest, falling shy by 6.6 percent with 55.1 percent.

U.S. HOTEL REVPAR is expected to grow steadily in 2024, driven by improving group business, inbound international travel, and traditional transient business demand, according to CBRE. This follows a strong performance in 2023 that muted the new forecast in some areas. The research firm forecasted a 3 percent increase in RevPAR growth in 2024, with occupancy improving by 45 basis points and ADR increasing by 2.3 percent. It indicates ongoing recovery of the lodging industry, with RevPAR in 2024 expected to surpass 2019 levels by 13.2 percent, CBRE Hotels said in a statement. CBRE's baseline forecast expects 1.6 percent GDP growth and 2.5 percent average inflation in 2024. Given the strong correlation between GDP and RevPAR growth, the economy's strength will directly impact the lodging industry's performance, the statement said. "We expect RevPAR growth to be slower in the first quarter due to last year's strong performance, but to reach its peak in the third quarter driven by the influx of inbound international travelers during the busy summer season," said Rachael Rothman, CBRE's head of hotel research and data analytics. "Urban and airport locations should particularly benefit from group and inbound international travel, as well as the normalization of leisure travel."

OCCUPANCY FOR U.S. hotels is now expected to finish the year a little down from the previous forecast by STR and Tourism Economics. However, projections for ADR and RevPAR recovery remain on track in the data firms' final forecast of the year. RevPAR is still expected to fully recover this year on a nominal basis, but not until 2025 when adjusted for inflation, according to the new forecast. The updated forecast lowered occupancy by less than a percentage point for 2022, standing now at 62.7 percent compared to the previously forecasted 63 percent released in August. "As expected, group business travel has been much more aligned with pre-pandemic patterns, specifically in October when group demand hit a pandemic-era high," said Amanda Hite, STR president. "Leisure travel has maintained its strength since our previous forecast update, and we expect these strong demand trends in both group and leisure to continue through the fourth quarter. Bottom-line performance has also persisted, with our most recent data showing strong profit margins due to lower employment levels and reduced services. The challenges around labor continue to be a concern, as high levels of hospitality unemployment and more spending on contract labor are pushing labor costs on a per-available-room basis above 2019 levels. We continue to take inflation and the likely recession into consideration, but the hotel industry has continued to show resilience through these tougher times, thus the steadiness of our updated forecast."

U.S. HOTEL PERFORMANCE improved in the first week of October due to school breaks and extended holiday weekend, but the performance was mixed when compared to 2019, according to STR. Hotel performance during weekdays declined due to Yom Kippur as expected. Post-Hurricane Ian demand in Florida also boosted the performance. Occupancy was 68.2 percent for the week ending Oct. 8, up from 66.4 percent the week before and decreased 3.5 percent from 2019. ADR was $153.79 during the week, increased from $149.71 the week before and up 16.9 percent from three years ago. RevPAR reached $104.83 in the first week of October, up from $99.36 the week before and increased 12.8 percent from 2019. Orlando reported the highest occupancy increase among STR's top 25 markets, up 1.9 percent to 73.6 percent, over 2019.

THERE WAS A slight slip in U.S. hotel performance in the third week of October compared to the week before, according to STR. However, numbers improved during the week when compared to 2019. Occupancy was 69.9 percent for the week ending Oct. 22, down from 70.3 percent the week before and down 0.5 percent from 2019. ADR was $157.43 during the week, slightly dropped from $157.52 the week before and up 16.7 percent from three years ago. RevPAR reached $110.11 in the third week of Oct. 22, just dipped from $110.78 the week before and up 16.1 percent from 2019. Among STR's top 25 markets, Tampa reported the largest increase in occupancy during the week, up 7.4 percent to 75.9 percent and RevPAR, increased 39.2 percent to $117.28, over 2019. It has been one of the markets in Florida that have seen a performance lift associated with post-Hurricane Ian demand.