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Denver's hotel supply and demand will grow at more than double the national average this year, according to a report from CBRE Hotels’ Americas Research.
Demand for hotels in Denver is expected to grow 5.1% this year, compared to 2.1% nationally. Supply is forecast to increase 4.6% versus 2% nationally. Average daily room rates are expected to rise 1.7%, reaching $133.43, before falling slightly in 2019. Revenue per available room is expected to follow a similar pattern, rising 2.1% to $98.29 before falling 0.6% next year.
“Since Denver has performed so strongly in recent years, developers have launched many new projects that will introduce new supply in 2018,” CBRE Hotels Managing Director Chris Kraus said. “What typically happens when there is strong supply growth is it creates competition that pushes down occupancy levels, puts downward pressure on room rates and lowers revenue growth.”
Because the underlying fundamentals of Denver’s economy are positive, 2018 occupancy is expected to reach near record highs and demand should continue to increase this year and next at more than twice the national average, Kraus said.
CBRE’s forecast for Denver hotel occupancy is 73.7%, well above the average for Denver and nearly eight points higher than the national rate, which is forecast to be 66%. The U.S. annual hotel occupancy level has risen and set a new record every year since 2015.
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