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Improvement Expected for Most Hotel Markets Worldwide
Executive Summary
CBRE expects 2025 U.S. RevPAR to grow 2% given the outlook for mid-single-digit increases in inbound international visitation, modest increases in group demand and a slight improvement in business travel. Margins and profits likely will decline as expenses outpace total revenue growth.
Tourism in Northern Latin America (Mexico, Costa Rica and Colombia) is expected to continue recovering. Tourist arrivals to Mexico and Costa Rica were up by 7% and 13%, respectively, last year, while Colombia welcomed 6 million international tourists.
The outlook for Europe’s hotel and tourism sector is mostly positive, with a more normal rate of RevPAR growth driven by intra-European and other global demand. However, geopolitical issues will remain a headwind, with some travelers limiting their visitation to Western Europe.
The Middle East is expected to leverage the gains made last year in tourism, hospitality, aviation and entertainment across multiple markets. Tourism to Dubai increased by 9% year-over-year, while tourism to Abu Dhabi jumped by 26%.
Most Asia-Pacific markets continued to recover to pre-pandemic levels, with total international arrivals in the region last year at 92% of 2019 levels. International arrivals are expected to exceed 2019 levels by 2.6% this year. Occupancy rates will continue to recover, while average daily rates will moderate.
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