Hotel Rates Increase While Occupancy Lags
According to the latest CBRE Hotels Research forecast, the U.S. hotel average daily rate (ADR) growth is expected to lead the revenue per available room (RevPAR) recovery, as the occupancy forecast slightly lags the other key indicators. Additionally, CBRE projects U.S. hotel occupancy to near 66% in 2025, about 98% of its pre-pandemic level. Since the end of May, occupancy has accounted for more than 70% of the RevPAR shortfall versus 2019.
The main reason for this is due to supply growth that is still coming through the pipeline, along with persistent restrictions on international travel. However, CBRE is hopeful business travel confidence will continue to improve, especially after children return to school in the fall.
“Our perspective is, individual business travelers and conference attendees do want to travel, and as health restrictions ease and vaccines roll out, we have seen an uptick,” CBRE analyst Rachael Rothman said. “The headwind is corporate budgets were set relative to 2020, the bottom in the cycle. Those budgets won’t immediately snap back to where they were in 2019.” (Business Travel News, 07.06.21)
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