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2020 U.S. hotel forecast slightly upgraded

With leisure demand stronger than anticipated in the fall, STR and Tourism Economics slightly upgraded the final 2020 U.S. hotel forecast just released during the virtual NYU Hospitality Conference.

2020 U.S. hotel forecastRegardless of the short-term upgrade, the forecast for 2021 remains functionally unchanged and full recovery in revenue per available room (RevPAR) is unlikely until 2024.

“Even with the encouraging vaccine news of this week, this pandemic and the subsequent economic impact will continue to limit hotel demand generators into the second half of next year,” said Amanda Hite, president of STR. “Business demand won’t return at a substantial level until caseloads are better contained, and in the meantime, recovery is going to be primarily driven by lower-tier hotels in the leisure-driven markets with outdoor offerings.”

“The economy has entered a slower stage of recovery, and COVID-19 will continue to shape travel conditions in coming quarters,” said Adam Sacks, president of Tourism Economics. “Assuming substantial progress is made against the virus in the first half of 2021, we anticipate travel demand will rebound strongly in the second half.”

STR and Tourism Economics project the industry will recapture 80% of demand by the end of 2021, although RevPAR will be 34.2% lower than in 2019. Average daily rate (ADR) and revenue will follow a slower recovery timeline, putting the industry on pace for full demand recovery at the end of 2023 and a return to pre-pandemic RevPAR levels by the close of 2024.

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