The last 12 months for US hotels were disastrous. However, the continued COVID19 vaccinations plus the stimulus funds may have revitalized the US lodging industry. In February 2021, CBRE Hotels Research predicts an average occupancy level of 43% for US hotels. It is also expected to go up to 55.1% by the second half of the year.
CBRE Head of hotels research & data analytics Rachel Rothman mentioned that they’ve considered different factors in their forecast. She said that “our forecast takes into account a national rollout of the COVID vaccines, plus the December COVID Relief Bill”. She also pointed out that the “worst of the top-line declines are now behind us”.
Senior hotel economist with CBRE Hotels Research Brahm Gallagher was surprised at the rate of vaccination rollout. He said that “the pace of vaccination distribution has topped two million a day, more than we originally foresaw”. He added that the Biden administration’s $1.9 trillion COVID package will boost the demand for lodging.
The same optimism is shared in the airline industry. Many are booking their flights. The TSA has recorded consecutive days of more than 1 million passengers that may have also increased the number of daily COVID19 cases. Despite the number of vaccinated Americans per day, the CDC reiterates to limit travel.
Performance Will Vary
CBRE noted that the performance is most likely going to vary depending on factors like location, property type, and chainscale. Rothman believes that “upper-priced properties will see faster growth in 2021”. However, he believed that occupancy rates at mid and lower-tier properties are most likely going to lead.
CBRE’s forecast believes that the 2019 levels will comeback by 2024. Also, in general, more expensive hotels will take longer to recover than lower-priced lodgings. Then, there will be a decreased supply in the market as hotels and other lodgings closed during the pandemic. It means less competition for those that were able to survive.
