Source: Hotel News Resource
June 1, 2020
Prior to the outbreak of COVID-19 in the US, RevPAR growth had been decelerating, increasing just 0.7% in Q4 2019 and 0.9% for the year overall. Slightly stronger growth occurred in the first two months of this year, with RevPAR increasing 2.2% in January and a front-loaded 1.7% in February, as COVID-19 began to impact market performance in the back half of that month.
The second quarter is expected to experience even greater declines, with RevPAR dropping close to 80% from the same period in 2019. The length and severity of this pandemic remains uncertain and is discussed in more detail in this expanded edition of Hospitality Directions US.
“Our updated US lodging outlook for 2020 and 2021 assumes continued social distancing measures at least through the remainder of this year, businesses slow to return to their offices and a very gradual upward trajectory in demand, beginning late Spring and led by the leisure segment in drive-to locations.” – Warren Marr, US Hospitality & Leisure Managing Director, PwC
Trends and highlights
- In late January 2020, when industry stakeholders gathered in Los Angeles at the most-recent large investment conference, the scale of the looming downturn of the domestic lodging industry was not yet fully recognizable.
- The restrictions on transatlantic flights that went into effect on March 13, 2020 and the ensuing images of domestic airports crowded with frantically returning travelers were final proof that the travel sector had largely come to a halt. Immediately, cash conservation became the shared focus of owners, asset managers, hotel companies, lenders, and third-party operators.
- The CARES Act, passed by the US Congress on March 27, 2020, promised timely relief for the hotel sector. Understanding terms, assessing eligibility, and applying for the Act’s SBA Paycheck Protection Program and market loans temporarily required industry participants’ full attention.
- As the CARES Act rush subsided focus selectively shifted to planning for the sector’s eventual relaunch. Industry associations and large hotel companies have been diligently working on new hygiene protocols, some of which have been finalized and published.