US Lodging Market Update: December 2021
By John Duran on February 17, 2022
Despite December’s soft performance, 2021 finished at an occupancy of 58%, which was still short of the 2019 occupancy of 66%, but still slightly better than the forecast of 57%. Further, the Lodging Market Mix for December showed a lower number of Group room nights, which is expected as this demand from this segment tends to wane with the holiday season. Of the top five markets, three of them derived more than 20% of their room nights from Group demand, whereas all five of the lowest-performing markets in terms of RevPAR percent change had less than 20% of their demand from Groups. Notably, the shifting of the demand segments is market-dependent as the seasonality of markets like Seattle and Boston is heavily influenced by the changing of the weather.
US Hotel sales volume ended the year at approximately $44.5 billion after a strong December, where sales volume totaled roughly $6.5 billion for the month. This marked a strong close to 2021 after a sluggish few months. Notably, the total dollar volume of sales during 2021 was 238% higher than 2020 and 15% higher than 2019. The strong performance in 2021 could be partially attributed to the need for liquidity as owners disposed of assets with the worst of the pandemic behind them.
Short-term rental data provided by AllTheRooms Analytics shows that bookings revenues ended 2021 up over 2019 and 2020 levels by a considerable margin despite bookings being softer for most of the year. This is the result of increases in the ADR for short-term rental bookings due to jumps in demand in high-priced markets.
In December 2021, the ADR for all property types was $256.76, a 30%+ increase over the previous year.