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According to the latest forecast from CBRE Hotels Research, the average daily rate of hotels in the US will exceed 2019 levels by 2024.
ADR growth is expected to lead the RevPAR recovery as the occupancy forecast falls slightly behind the other key indicators. CBRE is forecasting hotel occupancy rates in the US of 65.7 percent in 2025, roughly 98 percent of the 2019 level. Since the end of May, according to CBRE, the utilization has made up more than 70 percent of the RevPAR deficit compared to 2019.
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“The main reason is that supply growth is still coming through the pipeline,” said Rachael Rothman, head of hotels and data analytics at CBRE Hotels. “The openings took place in late 2019 during the course of 2020, and the openings are still in 2021. These were projects underway on the way into the pandemic.
CBRE’s supply growth forecast for 2021 shows that 29 of its 65 key markets are above the average supply growth of 3.6 percent. Those with the most forecasted hotel room openings include Austin, Charlotte, and Nashville.
CBRE also noted that business confidence had improved, suggesting that this would boost business travel when the offices reopen and the kids return to school. However, other challenges remain.
“Our perspective is that individual business travelers and conference attendees will want to travel, and as health restrictions ease and vaccines come in, we’ve seen an upswing,” said Rothman. “The headwind is that corporate budgets are set relative to 2020, the lowest point in the cycle. These budgets will not immediately revert to their 2019 levels. “
Rothman added that persistent restrictions on international travel are another challenge. In 2019, “international air travel to the US accounted for around 12 percent of total air travel. “Without a full recovery in international markets, some markets will lag behind. But business travel is coming back. It will be easier for people when the children go back to school in the fall. … This was not a normal summer. It could be in the fall, and we’ll see another recovery in business travel. ”
CBRE: Vaccines, Stimulus Trace 2nd Half of 2021 US Hotel Forecast
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