New hotel rooms coming into the U.S. market shouldn’t be a concern for established hotel operators, as demand will continue to exceed supply through 2019, according to CBRE Hotels’ Americas Research’s recently released September 2018 Hotel Horizons forecast report.
For Long Island, CBRE Hotels Research is forecasting a 73.6 percent occupancy rate for the remainder of 2018 and a slightly higher 73.7 percent for 2019. Long Island’s hotel industry continues to show strong fundamentals, resulting in Revenue Per Available Room (RevPAR) increases of 5.6 percent and 2.5 percent forecasted for 2018 and for 2019, respectively. In addition, the average daily rates (ADR), are forecast to increase by 3.2 percent overall this year and 2.4 percent in 2019.
“Massive projects like the Belmont Park mixed-use complex and the Ronkonkoma Hub are poised to raise the profile of Long Island as an attractive destination for business operations and family entertainment,” said New York-based Mark VanStekelenburg of CBRE Hotels. “We’re forecasting a measurable increase in both supply and demand throughout 2019 due to the surrounding development and Long Island proximity to New York City and the area’s major airports.”
Nationally, CBRE Hotels Research forecasts that supply will peak at a 2.0 percent gain in 2018 and then stabilize at the long-run average of 1.9 percent for the next two years. Further, the number of projects entering all phases of the development pipeline is declining.
“Now more than ever it is important for owners and operators to understand their local hotel market conditions and local economies when preparing their budgets for 2019,” said R. Mark Woodworth, senior managing director of CBRE Hotels’ Americas Research. “It is easy to be enthusiastically mesmerized by the positive outlook for the nationwide lodging market. However, don’t be caught off guard by not understanding what is happening in your neighborhood. It is very evident that local economic conditions, as well as changes to the local lodging supply, are going to significantly impact the performance of U.S. hotels in 2019.”
For media, data and analysis from the CBRE Hotels Research 2018-2019 forecast for the Long Island market is available upon request. For clients, the September 2018 edition of Hotel Horizons® for the U.S. lodging industry and 60 major markets can be purchased by visiting: https://pip.cbrehotels.com
CBRE Hotels is a specialized advisory group within CBRE providing capital markets, consulting, investment sales, research and valuation services to companies in the hotel sector. CBRE Hotels is comprised of more than 385 dedicated hospitality professionals located in 60 offices across the globe.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2017 revenue). The company has more than 80,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
