For the travel industry, 2020 ended simultaneously on positive and negative notes.
NB: This is an article from Pegasus
While the news of approved COVID-19 vaccines helped to rally stock prices of the major travel companies, surging cases in North America and Europe began to trigger lockdowns and tighter travel restrictions just prior to the holiday season.
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As such, the timeline for recovery remains inconsistent, with STR and the U.S. Travel Association predicting that travel will not return to pre-pandemic levels until the end of 2024. However, a modest recovery in 2021 is still expected for the U.S. hotel industry. Here are the key indicators and trends to watch for the year, as drawn from STR, Skift, as well as Pegasus’s recent U.S. Leisure Traveler Sentiment survey.
U.S. hotel forecast
According to STR’s latest U.S. hotel forecast, the industry should see a slight increase in occupancy levels this year, rising from 42.2% in 2020 to 52.2% in 2021, and a slight increase in RevPAR from $43.76 to $57.03. This would end 2021 at approximately 66% of 2019 levels, up from 50.5% in 2020.
Leisure travel intent remains strong
Despite the challenges of the pandemic, a significant percentage of Americans still traveled in 2020, and the recent surges and travel restrictions have not dampened the intent to travel, even if it has affected when and how often they actually travel. According to Skift Research Global Travel Outlook 2021, the percentage of the population that traveled remained consistent between 32% and 38% between June and November 2020, down from 46% and 41% in January and February prior to the U.S. border lockdown.
Of those that traveled, leisure travel has remained strong even as business travel has weakened.Looking forward, we should expect to see these trends hold in the short term. In a recent traveler sentiment survey conducted by Pegasus, approximately three-quarters of Americans reported that they were planning at least one leisure trip in the first half of 2021, with the majority of those travelers (78%) planning one to two trips over the six-month time period, with the majority of those trips being domestic. Almost two-thirds of survey respondents reported that they were taking less trips than they normally would due to the pandemic.