ew research from STR and Tourism Economics shows that the U.S. hotel industry won't fully recover until 2023, showing that U.S. hotels will average 40 percent occupancy this year and 52 percent in 2021, both down from 66 percent in 2019.
"Until the travel environment improves and group travel resumes, the recovery in hotel performance remains slow and far from pre-outbreak levels," said Amanda Hite, President of STR. We expect accommodation demand to fall by 40% in the third quarter of 2020 compared to the same period last year, but this is a substantial improvement from the 57% drop in the second quarter."
U.S. hotel occupancy and home prices rose slightly in the week ended Aug. 8 from the previous week. Compared with the same week in 2019, occupancy fell 32.6 percent to 49.9 percent, average daily rate (ADR) fell 24.9 percent to $100.88, and revenue per available room (RevPAR) fell 49.4 percent to $50.37.
For now, beach-destination hotels are in good shape, some with occupancy rates as high as 67 percent. But destinations like Hawaii are still largely off-limits to summer travel, with occupancy rates of only 20 percent, even at low rates.
Another challenge facing the U.S. hotel market is the still sluggish market for convention and business travel services such as weddings and conferences.
Adam Sack, President of Tourism Economics, said the impact on the Tourism industry would not disappear until at least early next year, with a cautious recovery starting in the first half of next year.
Occupancy rates are recovering faster than revenues, and hotel revenues are not expected to reach normal levels until 2024.
RevPAR will fall to $41.31 this year from $86.64 in 2019, STR and Tourism Economics said. But Hilton President and CEO Christopher Nassetta said last week that even with RevPAR low, guests are still expecting lower prices.
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