NASHVILLE, Tenn. — CoStar’s hospitality- analytics firm, STR, released its latest full-year 2021 forecast for the hotel industry outlining that leisure demand is surpassing pre-pandemic levels, but corporate spending is keeping growth projections for the remainder of the year somewhat muted.
Speaking during the “Prognosticating Post-Pandemic: The U.S. Hotel Forecast ” panel during the 2021 Hotel Data Conference, STR president Amanda Hite said business transient travel will end the year at 70 per cent of what was seen in 2019, compared to leisure transient ending the year 17-per-cent higher than that year.
“We still have a long way to go to get back to prior 2019 numbers, and we don’t expect a lot of group demand,” says Hite.
The updated forecast for U.S. hotels projects occupancy to grow 31.5 per cent year-over-year to 51.7 per cent and Average Daily Rate to increase 12 per cent to $115.50, fuelling a RevPAR increase of 47.3 per cent to $63.16. Early projections for 2022 call for a 13-per-cent year-over-year increase in occupancy, a six-per-cent increase in ADR and a 19.7-per-cent increase in RevPAR.
Hite says those growth numbers in rate seem more muted compared to 2020, but that’s in large part due to hoteliers’ surprising ability to hold strong on rates even during a historic drop in demand and a strong re-bound in rate as summer leisure travel picked up this year.
“It has been phenomenal to watch the revenue management that’s happening over the last quarter with the demand that’s been out there,” adds Hite.
Monica Xuereb, Chief Revenue Officer for Loews Hotels & Co., says the summer demand recovery wasn’t felt equally across all hotels, and that will remain the case until corporate travel spending returns.
“Most of [Loews] leans more heavily to the luxury and upper-upscale chain scales, so our 2021 forecast is a little bit less optimistic than obviously the overall U.S. forecast,” explains Xuereb. “But on a positive note, we’re at 91 per cent of the average rate that we had in 2019.”
Beyond hotel chain scales, the recovery has also been bifurcated between urban and resort properties, she said. “Resorts are doing great, but the city hotels are definitely challenged,” says Xuereb.