Long-Run (1946-2020) Effects of Inflation on Hotel Operating Performance | Part 2

by Jack Corgel, Ph.D., CBRE Consultant | Aug 09, 2022

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Key Takeaways

  • From 1946 to 1982, when inflation was high, hotel profits and average daily rate (ADR) were both positively related to inflation and statistically significant.
  • From 1982 to 2020, when inflation was low, the relationship between inflation and ADR remained strong, however hotel profits did not keep pace with inflation.
  • If history is a guide, then investors should expect hotel incomes to keep pace with inflation during this current period of high and seemingly persistent inflation.