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CBRE Hotels Research | Nov 12, 2024
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The pandemic-induced shift in work, travel and transportation patterns has led core Central Business District (CBD) hotels to underperform their non-CBD counterparts both in occupancy and daily rates. However, these trends may be masking broader reasons why non-CBD hotels are performing better: technological conveniences and shifting demand patterns.
Technology is changing which hotels outperform and the revenue contributions from different categories. There was a time when ancillary revenues from phone calls and movie rentals accounted for nearly 3% of total hotel revenues. Today, nearly every guest has their own phone, TV and movie-streaming device in their pocket.
A lot has been written about how increased competition from alternative lodging sources like short-term rentals, camper vans, cruise berths, glamping yurts, timeshares and vacation clubs has impacted hotel performance. While these alternative sources have certainly put downward pressure on hotel occupancy and average daily rates (ADRs), the impact of distributed technology like ride-share services and food-delivery apps has been less explored.
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