Metro Denver’s hotels saw a strong first quarter, marching – slowly but surely – to pre-pandemic occupancy levels, according to an industry report from real estate giant CBRE.

But the recovery remains behind the national average – largely because of the influx of all the newly-constructed, higher-priced hotel rooms that hit the Denver market in recent years.

The company looked at occupancy levels, average daily rates (ADR) per room and revenue per available room (RevPAR) – three key metrics by which a hotel’s success is measured.

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Denver’s occupancy rate plummeted to 41% during the depths of the pandemic in 2020, when the travel and leisure industry, and business travel, all but shut down for most of the year. CBRE experts forecast Denver’s occupancy to rise 7.7% in 2022 – to 63%. It should fully recover to pre-pandemic levels by 2024, according to the report.

Denver’s average daily room rate fell to $95.13 in 2020, and revenue per room to $38.81. That’s compared to $136.68 ADR and $100.32 RevPAR in 2019. Forecasters expect Denver ADR to hit $131.42 this year, and $139.39 by 2023. RevPAR levels are expected to rise 21% this year to $83.20 and hit $105.42 by 2024 in Denver.

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Those Denver recovery metrics are still behind national averages. CBRE anticipates a full recovery in ADR in 2022 and in RevPAR in 2023.

“Denver’s recovery trails the national forecast due to the large amount of new supply introduced into the market within the past five years, or that was in the construction pipeline prior to the onset of the pandemic,” said Zachary Alm, vice president with CBRE’s Valuation & Advisory Services in Colorado, in a news release. “The bulk of new supply since 2017 largely consists of upper and mid-priced properties – categories most negatively impacted by the pandemic. The good news is that upper and mid-priced properties are forecast to see the largest gains in demand and RevPAR in Denver over the next five years.”

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As far as nationally, the report points to several risk factors. 

“Since year-end 2021, several factors, such as the Russia-Ukraine war, high gas prices and the 19% pullback in the S&P 500 have increased the risk of a potential slowdown. However, for now, CBRE Econometric Advisors continues to forecast positive GDP and employment growth and continued elevated Consumer Price Index (CPI) through 2023,” CBRE said.

“To date, there has been no sign that the more than 50% increase in gas prices and the stock market’s hovering near bear-market territory are dampening hotel demand,” Rachael Rothman, CBRE’s Head of Hotel Research & Data Analytics, said.