California Regional Lodging Forecast (April update)
Tourism Economics
Report (ppt) PDF Download
Report (xlsx) XLS
(Date of Publication: May 17, 2022)
Forecast through 2024 of key lodging indicators including supply, demand, occupancy, average daily rate, revenue per available room, and revenue for California and California regions.
MAJOR TAKEAWAYS
- The US economy faces shifting headwinds. The Omicron wave has now been largely contained but higher inflation and greater uncertainty triggered by Russia’s invasion of Ukraine have emerged as key risks. We anticipate real GDP will grow 3.4% this year and slow to 2.1% next year.
- Inflation continues to run hot. In January, headline CPI surged to 7.5% y/y from 7%. Consumer prices now look likely to rise 6.3% in 2022. Excess savings and wage growth will soften the inflation blow and consumer spending will grow 3.4% this year.
- The February employment report indicated that the labor market ended the Omicron wave on strong footing. Job creation gained further momentum, with payrolls up by stronger-than-expected 678,000, and the unemployment rate fell to 3.8% even as the labor force participation rate edged up to a new post-pandemic high.
- Occupancy rate for California is forecast to grow 11% in 2022, following a 24% increase in 2021. Occupancy is expected to return to 97% of 2019 levels in 2023.
- ADR in California is forecast to grow 12.6% in 2022, following a 17.5% increase in 2021. ADR is expected to return to 103% of 2019 levels in 2022.
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