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The U.S. hotel industry will benefit from what is expected to be a relatively rapid economic turnaround in 2021 and 2022, according to the June 2020 edition of CBRE’s Hotel Horizons forecast report. CBRE foresees demand for U.S. lodging accommodations returning to pre-crisis levels in the third quarter of 2022. However, a lag in ADR growth will stall the recovery in RevPAR until 2023.

CBRE projects that U.S. hotel occupancy levels will decline as low as 26.2 percent during the second quarter of 2020. The firm also forecasts an annual occupancy level of 41 percent for 2020, and that luxury hotels will experience the lowest 2020 annual occupancy at 33.4 percent. Conversely, economy hotels are projected to achieve the highest annual occupancy level at 46.4 percent.

Based on CBRE’s forecast, the pace of declining occupancy, ADR, RevPAR, and demand is expected to begin lessening during the third quarter of 2020. Year-over-year growth in each measure is anticipated by the second quarter of 2021.

A critical factor driving the recovery is a reduction in the number of new COVID-19 cases. In the event of a prolonged need for social distancing and a persistent occurrence of new COVID-19 cases, CBRE has developed a forecast of a hypothetical downside scenario in which the recovery in RevPAR to pre-crisis levels is pushed out to 2025.

Photo: Lalmch from Pixabay

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