CBRE - Economic conditions are deteriorating quickly with the Covid-19 outbreak causing a sharp drop in economic activity.
Key Findings:
CBRE expects GDP growth will slow to 0.4% in 2020.
Demand will decline by 28% in 2020; ADRs are expected to decline 11% in 2020.
The most complex constraint impairing travel comes from social distancing efforts and travel or group gathering restrictions on global populations.
Properties that primarily cater to discretionary travel will be affected most, i.e. luxury, upper upscale, urban, airport, and resort properties.
Related Document
Expectations for the Year Ahead - An Updated 2020 Outlook
CBRE expects GDP growth will slow to 0.4% in 2020, down from our previous estimate of 1.9%. The COVID-19 outbreak will cause a sharp drop in economic activity in Q2. As early as Q3 2020, activity will begin to stabilize and a recovery is expected to be underway by Q4. Employment is already contracting with service sector jobs disappearing as many cities restrict social interaction. Governments throughout the world are implementing monetary and fiscal stimulus to try to prevent a more long-term global recession. Our current expectations are that this stimulus, as well as pent up demand, will lead to a substantial rebound in economic activity in 2021.
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