The Recovery Of The U.S. Hotel Industry Is Not Expected Until Late 2022

Industry |


According to CBRE’s latest Hotel Horizons Forecast Report, after going through the greatest decline in history, the U.S. lodging industry will benefit from what’s expected to be a rapid economic turnaround between 2021 and 2022.

CBRE believes the demand for U.S. lodging accommodations will return to levels before the crisis during the third quarter of 2022. That said, a lag in the average daily rate (ADR) will slow down the recovery in revenue per available rooms until 2023.

U.S. lodging has been hit hard due to economic activity and social distancing. According to the current forecast, there will be a 37% reduction in the number of rooms occupied in 2020 in comparison to 2019. There’s is comfort in knowing that travelers will be back on the road within 2 years.

U.S. hotel occupancy is projected to decline to 26.2% during the second quarter of 2020, according to CBRE, They are forecasting an annual occupancy level of 41.0% for 2020 and luxury hotels will suffer the lowest 2020 annual rate at 33.4% In turn, economy hotels are projected to reach the highest annual occupancy at 46.4%.

Consistent with prior recessions, the decline in demand has drained pricing. Based on data from STR, the national ATR level in April 2020 dropped 44.4% compared to the numbers in April 2019.


Low occupancy levels and closing of higher-end lodging will have a disproportionate percentage of the total U.S. demand for lower-priced segments. In 2021, most new demands will be for reopening higher-priced properties with higher room rates. This will propel the ADR growth upward.

The significant decrease in occupancy along with a forecast of 22.5% drop in ADR will result in a projected decline in RevPAR of 51.9% in 2020. For the future, CBRE sees the U.S. RevPAR surpassing its 2019 level in 2023 increasing the rise in demand and occupancy. ADR is still expected to lag behind in recovery until 2024.

ADR, RevPAR along with the demand is expected to ease up during the third quarter of 2020. Year growth is anticipated by the second quarter of 2021.

Although the deep trench in 2020 of lodging will be worse than it’s been over the past 80 years. Once social gathering restrictions are lifted it’s expected to return to strong economic conditions existed before 2020.

There will be a critical factor driving the lodging industry is the reduction in the number of COVID-19 cases. If there is a prolonged need for distancing and a persistent occurrence COVID-19, the level could be pushed out as far as 2025.

The resiliency of operators and the owners will be tested this year alone. Government and financial assistance will be necessary at that time.

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Good morning, day, or evening wherever you are in this world! I want to start off my bio by introducing myself as David, the writer and a single parent of one beautiful daughter. I started off writing for my college newspaper, while I was studying Law. In time I gave up my studies since I realized my writing can help readers around the world.