us skyline hotels recovery

The US lodging industry continues to regain strength with early signs of an accelerated recovery emerging since our last publication.

NB: This is an article from PWC

In our November edition, we assumed the significance and frequency of recent COVID-19 case spikes would likely increase the length and severity of the pandemic. Beginning in mid December, the US passed a milestone when the FDA announced emergency use authorization for three COVID-19 vaccines which has greatly helped mitigate the spread of the virus. The implementation of three vaccines, earlier than previously expected, has positively impacted the recovery timeline.

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We currently expect annual occupancy for US hotels this year to likely increase to 57.2%, and average daily room rates to increase 8.0%, with resultant RevPAR up 40.1% from last year. RevPAR is expected to finish 2021 at approximately 74% of pre-pandemic levels.

Despite increasing vaccinations (35 % of the US population was fully vaccinated as of May 11, 2021) and consumer optimism, lodging’s recovery is expected to remain uneven. Destinations reliant on leisure demand are expected to experience increasingly strong performance through the summer; however, as we approach Labor Day and companies’ back-to-office plans evolve, some markets are expected to fall off of summer highs. Destinations historically reliant on individual business, group and international demand may continue experiencing near-term weakness as companies evaluate travel policies, and countries assess cross-border travel risk.

In 2022, we forecast the vast majority of temporarily-closed hotels will likely have reopened and demand growth will continue to improve as the economy strengthens. Occupancy and ADR experience continued growth, resulting in a year-over-year RevPAR rebound of 15.2% – – or approximately 85% of prepandemic levels.

Challenges to the above outlook continue to include effectiveness of the national vaccination campaign; severity of virus mutations and corresponding vaccination efficacy against those mutations; and the speed at which the economy recovers.

Read rest of the article at PWC