Demand for hotels in the US is not expected to reach 2019 levels until 2023, according to a revised forecast by benchmarking, analytics and marketplace insights firm STR and Tourism Economics.
STR said that while its demand projections for 2020 had actually been revised upwards (from -45 per cent to -36.2 per cent), the firm expects it to take 11 quarters for the number of room nights in the US to reach 2019 levels.
And STR warned that Average Daily Rates (ADR) in the US could take even longer to recover, with Jan Freitag, senior VP of lodging insights commenting:
“With lower occupancy levels, and the influence of discounting as hoteliers compete for market share, ADR could show a slower recovery timeline even with more normalization each quarter—we improved our 2021 ADR projection from +1.7 per cent to +5.2 per cent. Despite this better growth rate next year, we do not see ADR recovering to pre-2020 levels in the next five years.”
Striking a more positive note Freitag said that “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”.
In a separate report STR said that the lower end of the US hotel market had seen “less severe performance declines throughout the time of the pandemic”, adding that last month “we saw limited-service properties begin to turn a profit when crossing the 45 per cent mark in occupancy”.
In April STR reported that the number of hotel rooms under construction across the US had reached an all-time high, with a total of 214,704 rooms under construction in March.