STR and Tourism Economics have updated their 2020 U.S. hotel industry forecast in the wake of the Covid-19 pandemic, predicting that nationwide RevPAR will drop 50.6%, to $42.84, for the year.
Concurrently, occupancy is expected to be down 42.6%, to 37.9%, while average daily rate (ADR) is set to dip 13.9%, to $112.91. Supply and demand for the year are predicted to decline 14.9% and 51.2%, respectively.
Prior to the pandemic, STR had projected that RevPAR for 2020 would be flat, with occupancy set to fall 0.3%. Supply and demand had both been expected to increase slightly, at just under 2% growth.
"The industry was already set for a nongrowth year; now throw in this ultimate 'black swan' event, and we're set to see occupancy drop to an unprecedented low," said Jan Freitag, STR's senior vice president of lodging insights. "Our historical database extends back to 1987, and the worst we have ever seen for absolute occupancy was 54.6% during the financial crisis in 2009."
For the week ended March 21, STR said it saw U.S. RevPAR plummet 69.5%, the steepest drop ever recorded in the hotel data analytics firm's 30-year history. However, Tourism Economics said it expects a fast rebound will help buoy overall performance for the year.
"Travel has come to a virtual standstill, but we expect the market to begin to regain its footing this summer," said Adam Sacks, president of Tourism Economics. "Once travel resumes, the combination of pent-up travel demand and federal aid will help fuel the recovery as we move into the latter part of this year and next year."
For 2021, STR and Tourism Economics are forecasting that U.S. hotel RevPAR will increase 63.1%, to $69.86, while occupancy will be up 57.3%, to 59.7%. ADR is expected to grow 3.7%, to $117.05, and supply and demand are set to surge 15.6% and 81.8%, respectively.