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U.S. hotel demand not expected to fully recover until 2023

June 30, 2020 Hotel Trends No Comments Email Email


Even with improving performance already underway, U.S. hotel demand will not return completely to pre-pandemic levels until 2023, according to the latest forecast revision from STR and Tourism Economics.“Compared with our last forecast, we actually improved our demand projection for 2020 from -45.0% to -36.2%, but we expect it to take 11 quarters for the number of room nights sold to rise to the corresponding levels of 2019,” said Jan Freitag, STR’s senior VP of lodging insights. “Similarly, it will take until 2023 for occupancy to reach the 20-year historical average. With lower occupancy levels, and the influence of discounting as hoteliers compete for market share, ADR could show a slower recovery timeline even with more normalization each quarter—we improved our 2021 ADR projection from +1.7% to +5.2%. Despite this better growth rate next year, we do not see ADR recovering to pre-2020 levels in the next five years.

“The good news is that demand and occupancy continue to rise slowly each week, and while slow, recovery should continue provided the country avoids significant setbacks in its progress against the coronavirus.”

“The worst is behind us,” said Adam Sacks, president of Tourism Economics. “Recent performance has shown travel activity is picking up tentatively. Though COVID-19 will remain a defining factor through the first quarter of 2021, the outlook anticipates further gains in travel as confidence is gradually restored and restrictions are eased.”



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