The U.S. hotel industry is projected to experience a 50.6 percent decline in revenue per available room in 2020 due to the impact of the COVID-19 pandemic, according to a special forecast revision from STR and Tourism Economics.
“The industry was already set for a nongrowth year, now throw in this ultimate ‘black swan’ event, and we’re set to see occupancy drop to an unprecedented low,” Jan Freitag, STR’s SVP of lodging insights, said in a statement. “Our historical database extends back to 1987, and the worst we have ever seen for absolute occupancy was 54.6 percent during the financial crisis in 2009. With roughly six of 10 rooms on average empty, already wavering pricing confidence will take a significant hit and drop [average daily rate] to a six-year low.”
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STR’s monthly data from February showed 55,734 hotels and 5,341,586 rooms in the United States. Property closures, however, are expected to lead to a 14.9 percent decline in roomnights available for the year, according to STR and TE.
For 2020, STR and TE project demand will drop 51.2 percent, occupancy will fall 42.6 percent to 37.9 percent and average daily rate will slide 13.9 percent to $112.91. Next year, the two companies predict supply will rise 15.6 percent, demand will jump 81.8 percent, occupancy will climb 57.3 percent to 59.7 percent, average daily rate will rise 3.7 percent to $117.05 and RevPAR will increase 63.1 percent to $69.86.
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“Travel has come to a virtual standstill, but we expect the market to begin to regain its footing this summer,” Adam Sacks, president of Tourism Economics, said in a statement. “Once travel resumes, the combination of pent-up travel demand and federal aid will help fuel the recovery as we move into the latter part of this year and next year.”