Strong Demand, Rate Growth Move Up Hotel Recovery Timeline
Weekday Bookings Indicate Return of Group and Corporate Travelers
The strength of U.S. hotel demand this year has renewed hoteliers’ optimism for a faster recovery, which appears likely according to industry forecasters, with some caveats.
During the “Statistically Speaking” session of the NYU International Hospitality Industry Investment Conference, Amanda Hite, president of STR, CoStar’s hospitality analytics firm, said U.S. hotel occupancy rebounded strongly in 2021, with July contributing most of the growth with steady gains in the other months. Average daily rate followed a similar pattern, and revenue per available room on a nominal basis has returned to where the industry was in 2013. On an inflation-adjusted basis, RevPAR is about 25% below its prior peak in 2018.
Rate growth has been significantly stronger than STR projected previously, prompting the firm to revise its forecast for ADR. The new forecast accounts for the recent rapid movement of inflation, which is the highest its been since the 1990s, as well as the expectation that inflation will slow in upcoming financial quarters, Hite said.
