With leisure demand stronger than anticipated in the fall, STR and Tourism Economics slightly upgraded the final 2020 US hotel forecast just released, while the Asia Pacific hotel industry reported its best performance levels since the first quarter of the year.
2020 US hotel forecast slightly upgraded; full recovery still unlikely until 2024
Regardless of the short-term upgrade, the forecast for 2021 remains functionally unchanged and full recovery in revenue per available room (RevPAR) is unlikely until 2024.
“Even with the encouraging vaccine news of this week, this pandemic and the subsequent economic impact will continue to limit hotel demand generators into the second half of next year,” said Amanda Hite, president of STR. “Business demand won’t return at a substantial level until caseloads are better contained, and in the meantime, recovery is going to be primarily driven by lower-tier hotels in the leisure-driven markets with outdoor offerings.”
“The economy has entered a slower stage of recovery, and COVID-19 will continue to shape travel conditions in coming quarters,” said Adam Sacks, president of Tourism Economics. “Assuming substantial progress is made against the virus in the first half of 2021, we anticipate travel demand will rebound strongly in the second half.”
STR and Tourism Economics project the industry will recapture 80% of demand by the end of 2021, although RevPAR will be 34.2% lower than in 2019. Average daily rate (ADR) and revenue will follow a slower recovery timeline, putting the industry on pace for full demand recovery at the end of 2023 and a return to pre-pandemic RevPAR levels by the close of 2024.
Asia Pacific hotel performance for October 2020
The Asia Pacific hotel industry reported its best performance levels since the first quarter of the year, according to October 2020 data from STR.
U.S. dollar constant currency, October 2020 (percentage change from October 2019)
- Occupancy: 54.1% (-23.2%)
- Average daily rate (ADR): US$74.08 (-23.7%)
- Revenue per available room (RevPAR): US$40.07 (-41.4%)
The occupancy and RevPAR levels were the highest for any month in the region since January 2020, while the ADR level was the highest since March 2020.
Local currency, October 2020 (percentage change from October 2019)
Australia
- Occupancy: 46.4% (-40.8%)
- ADR: AUD157.21 (-17.8%)
- RevPAR: AUD73.02 (-51.4%)
The occupancy level was the highest for any month in Australia since February, while the ADR and RevPAR levels were the highest for any month since March. A deep dive into the pandemic’s impact on Australia's development pipeline can be found here.
Mainland China
- Occupancy: 66.1% (-3.1%)
- ADR: CNY440.18 (-9.3%)
- RevPAR: CNY290.82 (-12.1%)
Boosted by Golden Week at the beginning of the month, the occupancy and RevPAR levels were the highest for any month in China since November 2019, while the ADR level was the highest since January 2020.
All of STR’s COVID-19 analysis can be found here.