USA Hotel Market: Trends & Analysis

The U.S. hotel industry was already set for a non-growth year. Real GDP growth, almost always a reliable indicator of hotel performance, had decelerated in 2019 for the first time in a decade due to weak capital spending, increased tariffs and slowing global growth. Similarly, 2019 RevPAR growth had decelerated from its 10-year average of 3.2% to 0.9%.

The COVID-19 pandemic, an external shock that has upended the trajectory of the U.S. and global economy, has forced economists and industry prognosticators to revise their forecasts to account for its impact and to project the timing and nature of the recovery.

Key findings of the report include:

Though growth rates decelerated, the hotel industry set “highest ever” records in 2019 across 4 of 5 key performance metrics (occupancy remained flat):

• $131.21 ADR
• $86.76 RevPAR
• 1.9 billion room nights available
• 1.3 billion room nights sold

Pandemic-influenced 2020 year-end hotel industry estimates are as follows:

• 37.9% Occupancy (-42.6%)
• $112.91 ADR (-13.9%)
• $42.84 RevPAR (-50.6%)

Post-pandemic 2021 forecasts for hotel industry recovery are as follows:

• 59.7% Occupancy (+57.3)
• $117.05 ADR (+3.7%)
• $69.86 RevPAR (±63%)

As with previous recessions, domestic leisure demand – fuelled by cheap gas and the relaxation of lockdown orders – will be the first to bounce back, followed by corporate transient and corporate group demand drivers as a feeling of safety takes hold.