The performance of the hospitality industry is expected to accelerate in the second half of 2021

Global real estate consultant CBRE reports this week the continued rollout of COVID-19 vaccinations and additional stimulus funds in the United States have strengthened the foundations for the recovery of the accommodation industry in the United States.

According to the February 2021 edition of Hotel Horizons, CBRE Hotels Research forecasts a national average occupancy rate of 43.0% in the first half of 2021, with an acceleration to 55.1% in the second half.

"Our current forecast takes into account a nationwide rollout of COVID vaccines, as well as the December COVID relief bill, both of which support projections of improved performance in the second half of the year," Rachael Rothman said. , Hotel Analytics Research and Data Manager for CBRE. “Based on our forecast, the worst declines in revenue are now behind us. We are starting to see green shoots of a recovery in air travel data, booking models and revenue per available room (RevPAR ). "

“Since we made our forecast for February 2021, the vaccine delivery rate has exceeded 2 million per day, more than we originally expected. In addition, the recent COVID package of 1.9 trillion dollars should stimulate demand for accommodation, while providing much needed financial assistance to hotel owners. ”said Bram Gallagher Ph.D., senior hotel economist at CBRE Hotels Research.“ The combination of these factors strengthens our improved outlook for the second half of 2021 and beyond. "

Performance varies

CBRE advises hotel owners and operators to assess performance by location, property type and chain scale, and 2021 is no exception.

“High priced properties will experience faster growth in 2021, fueled by easier comparisons and an increase in business and leisure travel. However, occupancy levels will still be lower than mid-level properties and lower, ”Rothman said.

RevPAR earnings will also vary widely by market. Hotels in markets such as Minneapolis, Washington, DC, Boston, Chicago and Philadelphia are expected to enjoy RevPAR gains of over 50.0% during the year. However, the results will still be significantly lower than the previous peaks. By the end of the year, smaller cities like San Bernardino, Dayton, Oklahoma City, Virginia Beach, and Savannah will be closer to returning to RevPAR 2019 levels than other markets.

Growth beyond 2021

CBRE's February 2021 forecast calls for a return to RevPAR 2019 levels in 2024. In general, properties that operate in lower-priced chain segments will recover sooner than higher-priced hotels.

The reduction in the traditional hosting supply is one of the factors driving the improvement in hosting performance in the second half of this year and beyond. The combination of permanent closures and fewer projects under construction resulted in a reduction in CBRE's planned hotel supply for 2021 to a gain of just 0.9% for the year. CBRE estimates that supply growth will remain below 1% until 2023. This is less than the long-term average supply change of 1.4%.