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3/18/25
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This report provided by CBRE
CBRE forecasts Seattle’s hotel sector will reach record highs for revenue per available room (RevPAR) in 2025, as a result of increased business travel, major sporting events and delivery of a new waterfront development.
CBRE estimates RevPAR in Seattle will be $131.69 in 2025, a record-high since 2019. This is a 2.7% increase from 2024, outpacing the 2% national average.
“Hotel demand in Seattle increased at the end of 2024 and is off to a good start this year. Recent office mandates by large employers are already positively impacting hotel performance with increased business travel,” said Alan Jutte, vice president with CBRE’s Hotels Valuation & Advisory group. “Seattle is well-positioned to accommodate increased demand as a result of growing leisure activity and numerous sporting events planned for 2025 and 2026. The completion of the new Overlook Walk connects Pike Place Market to the Waterfront, and the impending completion of the Waterfront Park project will expand Seattle’s center of leisure significantly.”
CBRE expects restrained supply growth due to high financing and construction costs, averaging less than 1% over the next three years. In 2025, Seattle may experience a modest supply increase (2.3%) and demand increase (2.2%) as several planned events attract travelers.
Jutte continued, “Hotel operators still face challenges as rising labor costs continue to put pressure on operating margins.”
However, potential additional tariffs, labor shortages or the Fed pulling back on further interest rate reductions could temper supply growth even more, enhancing pricing leverage and elevating replacement costs for existing assets.
National Trends
CBRE forecasts a 2% increase in RevPAR growth in 2025, with occupancy improving by 23 basis-point (bps) and average daily rate (ADR) increasing by 1.6%. This projected growth indicates the continued recovery of the lodging industry, with RevPAR expected to be 16.6% higher in 2025 compared with pre-pandemic levels in 2019. Urban locations have outperformed due to improved group and business travel and continued recovery of inbound international travel.
CBRE’s baseline forecast includes a 2.4% GDP growth rate and average inflation of 2.5% for 2025. Given the typically strong correlation between GDP and RevPAR growth, the relative strength of the economy will directly impact the lodging industry’s performance.
CBRE projects RevPAR growth within the 1.5% to 3.5% range over the next several years, barring a recession, due to many factors: numerous events planned for the next four years including the 2026 FIFA World Cup in the U.S., Mexico and Canada; the 2028 Summer Olympics in Los Angeles; the United States’ 250th anniversary in 2026; the ongoing appeal of national parks, global gateway cities, and U.S. leisure destinations.
This article was prepared by CBRE as part of its February 2025 edition of Hotel Horizons for the U.S. lodging industry.
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