STR and Tourism Economics have further downgraded their U.S. hotel industry forecast for 2020, with Tourism Economics president Adam Sacks predicting the sector won't rebound to 2019 levels until the first quarter of 2024.
"After the great financial crisis, it took two years to get back to peak levels of demand," said Sacks during a virtual presentation at STR's 2020 Hotel Data Conference on Thursday. "So why [longer] for this crisis? We believe it's not appropriate to start the timer, in terms of economic rebuild, until we're largely through the peak of the pandemic ... which is really going to be the beginning of 2021."
Sacks added, however, that he thinks the hospitality industry will be able to recoup around 81% of 2019's demand levels by 2021, suggesting that hotels will be able to operate "at a relatively normal level in about a year's time."
STR's latest U.S. forecast projects that nationwide RevPAR will decline 52.3% for 2020, while ADR and occupancy will slip 20.9% and 39.7%, respectively. Demand is expected to be down 38.9% and supply is predicted to shrink by 3.7%.
STR's previous forecast update, released in June, expected RevPAR to be down 50.6% and occupancy to fall 37.1%. Demand was formerly projected to fall 36.2% for the year.
The group's ADR and supply predictions were the only two metrics to show slight improvement, with the June forecast previously predicting those metrics would decline 21.4% and 4.4%, respectively.
"It's sort of surprising to see the ADR forecast that we have -- I think everyone thought it would be worse," said STR president Amanda Hite during a virtual panel. But with travel restrictions and quarantines in place and case numbers at record highs, cutting rate isn't going to induce more people to travel, and revenue managers know it. "In some cases, we've seen hotels that are running at higher ADR this year than they had last year," she said.
For 2021, STR's updated forecast predicts that RevPAR will be up 37.9% and ADR will carve out a 5.6% gain. Occupancy is expected to grow 30.5%, while demand will be up 32.2% and supply will rise 5.8%.
"Post-9/11 we thought we'd never fly again; we were wrong," said Jan Freitag, senior vice president of lodging insights for STR. "Post-2008, we said we would never meet at a resort again; we were wrong. I think saying that we're not traveling ever again is going to be wrong.
"Yes, there are going to be disruptions, but I think overall, the hotel and travel industry is resilient. We will muddle through in the beginning, but then come out pretty healthy after that."