THE U.S. HOTEL industry is projected to report a 50.6 percent decline in RevPAR in 2020 due to the impact from the COVID-19 pandemic, says the special forecast revision from STR and Tourism Economics.
Demand in the industry will be reduced by 51.2 percent in 2020, before reporting an increase of 81.8 percent in 2021. The occupancy rate will be down by 42.6 percent in this year, which will increase by 57.3 percent in 2021.
ADR for hotels will be down 13.9 percent in 2020 to $112.91. In 2021, ADR will be up by a marginal 3.7 percent to $117.05. The RevPAR will be increased by 63.1 percent in 2021 to $69.86.
STR’s latest monthly data, from February, showed 55,734 hotels and 5,341,586 rooms in the U.S. Property closures are expected to lead to a 14.9 percent decline in room nights available for the year.
“The industry was already set for a non-growth year, now throw in this ultimate ‘black swan’ event, and we’re set to see occupancy drop to an unprecedented low,” said Jan Freitag, STR’s senior vice president of lodging insights. “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 ADR to a six-year low.”
Adam Sacks, president of Tourism Economics, said that travel has come to a virtual standstill.
“We expect the market to begin to regain its footing this summer. 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,” he said.
STR previously reported a 56.4 percent drop in occupancy for the second week of March.