Strategic hotel affiliation in a low-RevPAR, high-brand-proliferation environment.

Major hotel companies added brands at a 7% compound annual growth rate (CAGR) and loyalty program members at a 15% CAGR over the past 10 years.

However, since 2019, our analysis suggests additional brands do not necessarily result in stronger RevPAR performance. For example, the fastest growing brand family by number of brands (+15% CAGR) had the slowest median RevPAR CAGR at just 0.3%.

• Inflation has fully eroded RevPAR gains over the past five years. While RevPAR for the brand families included in our analysis is nominally up 9.3% since 2019, it is down 10.9% in inflation-adjusted terms. This suggests that shadow supply from alternative lodging sources and growth in traditional lodging supply are more than offsetting the demand recovery, resulting in reduced pricing power.

• The gap between the best and worst performing brands is widening, as the percentage of those that have outperformed the 50-brand sample average has fallen to 28% since 2019 from 52% between 2014 and 2019.

• The strongest brand family posted a 2.1% RevPAR CAGR from 2014 to 2024, while the weakest contracted by 0.2%. Cumulatively, this 26% spread can significantly affect long-term investment returns and, depending on leverage levels, be the difference between profits and losses.

• The upper-midscale segment has consistently been the best performer both before and after the COVID pandemic, offering more predictable returns. The segment benefits from wide brand recognition, a flexible customer base and simplified operations, while guests prefer its offer of free breakfasts and lack of resort fees.

• Midscale and economy chains that are facing both RevPAR declines and closures posted the slowest RevPAR growth between 2019 and 2024. The reduction in room count should ultimately bring supply and demand into balance, setting newer economy and midscale prototypes up for improving topline and profits.

Key Findings

Early in the COVID recovery period, it was hard to separate pandemic-era shifts from a new normal. Five years after the pandemic’s start, the reasons why, how and where people travel, as well as where they stay, has changed due to the proliferation of hybrid work, greater availability of short-term rentals and the growth in hotel brands and their loyalty program members.

This has led to a widening divergence in hotel brand performance, making it more difficult than ever to pick a winning brand. CBRE Hotels Research publishes the longest standing and most comprehensive database of publicly disclosed hotel brand key performance indicators (KPIs) in the industry. Following are key findings from this year’s update to the data set, with a particular focus on the past 10 years.

Adding more brands may mean broader reach, but doesn’t necessarily result in faster RevPAR growth

Major brand families have doubled their portfolios since 2014 to an average of 24 brands each in 2024. Loyalty program membership has increased at a 15% CAGR over the same period. However, since 2019, the fastest growing brand family by number of brands (15% CAGR) posted the slowest median RevPAR CAGR of just 0.3%.

Although brand proliferation may drive loyalty member growth, our analysis suggests a negative correlation between brands and RevPAR growth within the same brand family.

Digging deeper, not all brand additions perform equally. Some, like glamping or all-inclusive resorts, may attract new customers and give loyalty members less traditional locations and experiences where they can redeem the more than $12 billion worth of loyalty points they’ve stored.

Other brands, like middle-tier conversion or extended-stay brands, which increased by more than 40% over the past five years, are the most likely to fuel unit growth for franchisors at the risk of cannibalizing existing hotels.

Figure 1: Growth in the Number of Brands per Brand Family vs. RevPAR CAGR

Source: Choice, Hilton, Hyatt, IHG Hotels & Resorts, Marriott, Wyndham public filings.

RevPAR growth is muted, and it doesn’t appear to be timing

Over the past five years, RevPAR has increased by a 1.8% CAGR, up by 20 basis points (bps) from the prior five-year period.

However, this negligible growth is less than the rise in inflation, which increased by a 4.2% CAGR from 1.6% over the same two time periods. The net result is that despite nominal RevPAR increasing by 9.3% cumulatively, real RevPAR is 10.9% below 2019 levels after inflation.

This suggests that shadow supply from alternative lodging sources and growth in traditional hotel supply are more than offsetting the demand recovery, resulting in reduced pricing power.

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