STR moves forecast for COVID-19 recovery to 2024

RECOVERY FROM THE COVID-19 pandemic took one more step further away with the release of STR and Tourism Economics forecast. The forecast, released at the opening of the 2020 Hotel Data Conference online Thursday, now says U.S. hotel demand and room revenue remains unlikely until 2023 and 2024, respectively.

The new forecast is close to the one STR released in late June that set 2023 as the year for hotel performance to return to 2019’s level. A recent surge in COVID-19 cases in several states has played a part in keeping hotel demand down, said Amanda Hite, STR president.

“Performance recovery is going to remain slow and well off of the pre-pandemic pace until the context for travel improves and group business begins to return,” Hite said. “To show how far levels have fallen year over year, the 40 percent demand decrease we project for the third quarter of 2020 will be a substantial improvement from the 57 percent decline realized during the second quarter. Even with a slight improvement in ADR projections through 2021, pricing confidence will lag an eventual rise in occupancy. As a result, the $32 billion gain we forecast for room revenue from 2020 to 2021 will push the industry to a level that is still 32.5 percent lower than 2019.”

To some extent, as occupancy continues to rise in most state week to week, the recovery has begun, said Adam Sacks, Tourism Economics president.

“Economic recovery is ongoing, but fragile, and COVID-19 is expected to continue to define the travel environment through the first quarter of 2021,” Sacks said. “This sets a pace of tempered, cautious recovery in travel activity in the near term, with much stronger growth anticipated in the second half of next year.”

In June, STR announced the new online format for the HDC in response to safety concerns because of the pandemic. It was originally scheduled to be held at the JW Marriott Nashville in Nashville, Tennessee.