The second quarter of 2022 proved unexpectedly strong for the U.S. hotel market, despite a drop in U.S. GDP and the highest rate of inflation in 40 years, according to a new report by CBRE.

The company found that revenue per available room, or RevPAR, was up 38% year-over-year during Q2 2022. At $98.84, RevPAR was at an all-time quarterly high, besting the same quarter in pre-pandemic 2019.

The 2022 increase was supported by increases in average daily rates for U.S. hotels — up 25.5% year-over-year — as well as stronger occupancy, which was up 9.9%.

CBRE also predicts better performance for the U.S. hotel sector during the second half of 2022 than it did in earlier forecasts. The company expects a RevPAR gain of 14.7% year-over-year during the second half, up from its previous projection of 13.1% year-over-year.

The revision is based on a forecast of a 3.5 percentage point increase in expected ADR growth, higher than the previous forecast issued in May 2022, according to the report.

Inflation continues to boost growth for hotel revenue, but it is also a headwind, considering that properties need to deal with rising wages, utilities, food and beverage costs, insurance and capital expenditure increases, CBRE reports. Typically, luxury hotels have had the greatest ability to increase room rates to offset inflation.

“As we progress through the third quarter, it is worth noting that the brisk pace of demand recovery has begun to slow. We are seeing a pullback in ADRs in select record-setting markets,” Rachael Rothman, CBRE’s head of hotel research and data analytics, said in a statement.

“Despite the slowing pace of growth, we expect the continued recovery in travel demand to be driven by incremental group and inbound international travel, followed by a modest uptick in transient business,” Rothman said.