A key performance indicator for hotels is expected to grow more slowly than initially anticipated this year, according to research from CBRE.

CBRE revised its earlier full-year forecast that U.S. revenue per available room, or RevPAR, would grow by 2.0% to a lower expectation of 1.2% growth in 2024.

“Although CBRE had expected a slowdown, growth has been more modest than anticipated, despite a resilient economy,” the report’s authors wrote.

A rise in incoming international travelers and a slight pickup from business and group travelers haven’t been enough to make up for “record outbound overseas international travel; a weaker consumer; and increased competition from short-term rentals, cruise lines, and other lodging alternatives,” according to the CBRE report.

Although expectations for full-year growth have been reduced, RevPAR is expected to improve by 2% in the second half of the year. In the first half of 2024, it grew just 0.5%, according to CBRE.

Not all hotel types will see a boost. CBRE expects urban and airport-adjacent hotels to outperform while resort-style hotels lag as a result of workers being required to return to the office and the drop-off of travel demand that built up over the early days of the pandemic and the associated lockdowns.

Of the 57 hotel markets that CBRE tracks, eight have not fully recovered. Most of those are in northern California and the upper Midwest. In June, the delinquency rate among CMBS loans for the lodging sector in the San Francisco metro area shot up to 41.6%, an enormous increase over 5.7% in the previous June, the Wall Street Journal reported.

Major East Coast markets including New York, Boston, Washington, D.C., Atlanta and Miami are now seeing RevPAR above 2019 levels, CBRE said.