June 1, 2016
Despite average room rates rising 3.2% in Orange County during Q1 2016, the higher end of the hospitality market is producing subpar results, according to a report from CBRE Hotels. Visitors are still coming, and RevPAR was up 4.7% compared to Q1 2015.
Performance is lagging within the county’s priciest property sector. In Newport Beach, Q1 2016 average nightly rates hit $239, an increase of 1.8%. However, occupancy slipped to 76.8% from 77.7% in Q1 2015, which nudged cash flow up just 0.7%. In South County, cash flow only picked up 1.9%, and in Huntington Beach cash flow dropped 0.5%
CRE leaders like R.D. Olson’s Robert Olson believes the market likely has 18 months of solid performance ahead. But higher end properties will probably see fewer foreign tourists and business travelers.