Recovery of hotel rates can take up to five years, according to STR: Travel Weekly


The pandemic is expected to wipe out about a decade of RevPAR gains for the U.S. hotel industry, hotel data firm STR reported on Tuesday, with nationwide room demand and the Average Daily Rate (ADR) unlikely to return to low levels. 2019 levels before 2023 and 2025, respectively. .

During a webinar, Jan Freitag, senior vice president of hosting information for STR, said he expected the US RevPAR to drop to $ 41.31 for 2020, from 86.64 $ in 2019. For 2021, RevPAR is expected to increase to $ 56.95, a sum of approximately comparable to US RevPAR levels in 2010.

The latest projections come as the recovery in the US hotel market begins to stall in the third quarter.

After hitting a low point with an 80% drop in April, RevPAR in the United States improved by around 10 percentage points each month between May and July. This trend slowed considerably in August, however, with RevPAR down 47.3% from the same month last year, and September’s RevPAR down 46.1% year-on-year.

“As September approaches, we see that the performance hasn’t really changed much,” said Freitag. “And we’re not sure there is really a catalyst for this to turn into Q4.”

Freitag added that the recovery of room rates is experiencing a similar slowdown. After rebounding steadily through late spring and the first part of summer, US ADR fell 22.7% in August and 24.9%, to just over $ 99, in September. .

For 2020, STR predicts that ADR will be down 20.9% for the year. For 2021, ADR is expected to increase by almost 6%, albeit from a “very low base”.

“It’s fair to say ADR pickups are never V-shaped,” Frietag said. “After September 11, when we look at annualized ADR, it went from a 12-month high to a low, and then from a low to a 24-month high. And then the same thing happened after 2008/2009, when ADR went down [over] 17 months from peak to trough and it took 36 months to go from trough to peak. It is not unreasonable to assume that the annualized ADR will continue to deteriorate and that it will take us twice as long for it to come back. “

Freitag added that each hotel’s “mileage” may vary depending on destination and property type, as beach and rural markets like the Florida coast, Montana, Idaho and Wyoming continue to show. strong occupancy rates, driven by market demand for leisure travel.

Likewise, economy, mid-range and upper-mid-range hotels outperformed the high-end segments, mainly due to the latter’s reliance on group and corporate travel.

“There’s really no group demand,” Freitag said. “This will be the main ball for 2020. We’re going to continue to see the performance of high-end properties slow simply due to the complete absence of business groups and associations. Larger markets that have traditionally lived through conventions. city-wide and large meetings [have been] hit disproportionately harder too. “

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