When it comes to mapping a post-pandemic recovery, it's clear that the U.S. hotel sector is in uncharted territory.
"This is not a cycle," said Isaac Collazo, vice president of competitive intelligence for InterContinental Hotels & Resorts, during STR's Hotel Data Conference, held virtually in mid-August. "This is truly a disruption. We've never seen anything quite like this."
According to STR data, U.S. hoteliers saw their steepest decline ever the week of April 11, with RevPAR down almost 84%. By comparison, past down cycles spurred by 9/11 and the Great Recession bottomed out in their lowest weeks with declines of 38% and 25.3%, respectively.
The sheer scope of the Covid-19 crisis has led analysts to adjust their recovery projections新沙巴体育 accordingly. Adam Sacks, president of Tourism Economics, predicts that it will take roughly three years for hotel demand to bounce back to 2019 levels, versus approximately two years to get back to peak demand after the Great Recession.
"Why three for this crisis?" said Sacks. "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."
Hotel revenue is expected to take even longer to return, with Sacks projecting that it will take until the first quarter of 2024, or a total recovery period of 15 quarters, for revenue to rebound to 2019's high. In the wake of the Great Recession, U.S. hotel revenue was able to climb back to its prior peak within just nine quarters.
Still, Sacks emphasized that the industry will be able to see some meaningful relief as early as next year. He said he believes U.S. hotels will recover around 81% of 2019's demand levels and 68% of its revenue levels by the end of 2021.
新沙巴体育"We'll be whole enough that hotels are going to be able to operate at a relatively normal level in about a year's time," Sacks asserted.
Despite this measured optimism, STR and Tourism Economics were forced to downgrade their U.S. hotel performance forecast for the year. They project that nationwide RevPAR will decline 52.3% for 2020, while average daily rate 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%.
"It is slightly worse than what we had forecast at the end of June," said STR president Amanda Hite. "And that's really around demand. We went into this thinking we'd see some small meetings and corporate travel happening at the end of the third quarter and fourth quarter of this year. And that's not what we're anticipating now."
Segments of the industry less dependent on corporate and group travel, however, are showing stronger signs of recovery新沙巴体育. Vail Ross, STR's senior vice president of global business development and marketing, confirmed that the U.S. hotel industry's economy and midscale sectors are rebounding faster than their luxury and upper-upscale counterparts.
She cited data indicating that RevPAR at U.S. luxury and upper-upscale hotels fell 78.8% and more than 77%, respectively, in June. But in the same month, RevPAR was down only around 44% in the midscale class and roughly 36% in economy.
新沙巴体育"Luxury and upper-upscale are going to tend to be in those urban and resort-type locations that have been hit the hardest, not only by the number of [Covid-19] cases but by impact from international travel and the lack of corporate travel and group," said Ross.
Hotels in nonurban, drive-to locations, and particularly those near popular beach or mountain leisure destinations, have also fared relatively well.
新沙巴体育According to STR, for the week ended Aug. 1, markets with the highest weekend occupancies in the U.S. included locales like Colorado Springs, Colo.; McAllen/Brownsville, Texas; and the New Jersey Shore at 91.4%, 91.2% and 82.8%, respectively.
"We're talking about areas of the country with the highest occupancy rates that we certainly would not be talking about normally," said STR's Hite. "It's markets outside of the Top 25 that are performing much better than the Top 25. And that will be the story for the rest of the year."
新沙巴体育Meanwhile, with domestic, drive-to leisure travel propelling the vast majority of hospitality's comeback thus far, hoteliers are banking on an extension of the summer travel season to help buoy a continued recovery.
"Kids aren't going back to school, or [are doing so] virtually, and a lot of offices aren't opening up, so there's a lot more flexibility to extend the leisure travel season, and we can already see early telltale signs of that," said Hilton Worldwide CEO Chris Nassetta新沙巴体育 during the company's Q2 earnings call in early August. "It's been very hard to get availability in certain locations in July and August, so it's extending into September and maybe October."