STR, Tourism Economics adjust U.S. hotel forecast downward

STR and Tourism Economics have adjusted their hotel forecast for the rest of 2020 and into 2021. The latest projection calls for a 57.5 percent decline in revenue per available room in 2020, then a 48 percent increase in the metric in 2021.

Click here for all of Hotel Management's COVID-19 coverage

Each percentage change was downgraded from a late-March forecast revision, which called for a 2020 RevPAR decrease of 50.6 percent followed by a 2021 increase of 63.1 percent.

“Performance levels are dismal from every angle, but at the very least, weekly data through May 9 indicates that the industry has already hit bottom and begun a steady ascent,” said Amanda Hite, STR president. “The rate of recovery will be slow even as distancing measures are eased and most of the country reopens. Concerns around the safety of travel and leisure activity will dictate how long it takes the industry to regain its footing. Regardless of timing, the leisure segment will be first out of the gate, especially from drive-to sources.”

Virtual Event

HOTEL OPTIMIZATION PART 2 | Now Available On-Demand

Survival in these times is highly dependent on a hotel's ability to quickly adapt and pivot their business to meet the current needs of travelers and the surrounding community. Join us for Optimization Part 2 – a FREE virtual event – as we bring together top players in the industry to discuss alternative uses when occupancy is down, ways to boost F&B revenue, how to help your staff adjust to new challenges and more, in a series of panels focused on how you can regain profitability during this crisis.

“The initial recovery in travel will be uneven and staggered, with gains in many markets determined by virus-specific factors more than economic factors,” said Adam Sacks, Tourism Economics’ president. “The gradual relaxation of social distancing in the second half of this year will primarily benefit regional leisure travel with the business and group travel recovery lagging. We anticipate it may take until 2023 to recover to 2019 peak demand levels.”

Chain Scales and Top Markets

Using economic methodology, which assumes no temporary hotel closures, the luxury segment is projected for the lowest 2020 occupancy at 25 percent. Economy properties are forecasted for the highest occupancy level of 45.2 percent. In aggregate, the top 25 markets are projected to perform worse than the rest of the country. New Orleans (28 percent) and San Diego (41.1 percent) are expected to show the lowest and highest occupancy levels, respectively.

Property Closures

As of May 14, STR’s database showed a total of 3,151 temporary U.S. hotel closures with 1,842 hotels reopened.

“Temporary closures came in at a lower number than we anticipated based on information back in March,” Hite said. “The properties offline will reduce national supply in several months, but we do not anticipate a significant number of permanent closures. Buyers are always out there with the confidence that they can make a property work based on the right level of transaction discount.”

Suggested Articles

Hotelbeds chose the Vonage Contact Center for its Salesforce integration as well as its omnichannel, routing and reporting capabilities.

Buildings in Texas and the Northeast are being converted into hotels.

RMS' internet booking engine accepts direct online bookings from any device in real time.