Even with improving performance already underway, consumer demand for U.S. hotels is not expected to return fully to pre-pandemic levels until 2023, according to the latest revised forecast released by data-analytics firm STR and insight group Tourism Economics.
In terms of occupancy, STR’s Senior Vice President of Lodging Insights, Jan Freitag said, “Compared with our last forecast, we actually improved our demand projection for 2020 from -45.0 percent to -36.2 percent, but we expect it to take eleven quarters for the number of room nights sold to rise to the corresponding levels of 2019. Similarly, it will take until 2023 for occupancy to reach the 20-year historical average.”
Giving details he said, given decreased overall occupancy levels and the expectation that hoteliers will discount their rates to compete for market share, average daily rate (ADR) could take longer to recover, even while normalizing progressively each quarter.
Freitag said that STR’s revised ADR 2021 projections actually rose to 5.2 percent from the 1.7 percent year-over-year growth listed in the prior forecast. “Despite this better growth rate next year, we do not see ADR recovering to pre-2020 levels in the next five years,” Freitag explained.
“The good news is that demand and occupancy continue to rise slowly each week, and while slow, recovery should continue, provided the country avoids significant setbacks in its progress against the coronavirus,” Freitag said.
