Source: Hotel News Now
By Emmy Hise and Aran Ryan
June 29, 2020
BROOMFIELD, Colorado, and PHILADELPHIA—Forecasting U.S. hotel performance is a moving target due to unknown variables such as government regulations and containment measures related to COVID-19.
As the impact from the pandemic continues to evolve, Tourism Economics and STR released an updated total U.S. hotel-industry forecast on 26 June.
The primary drivers are:
- Economic conditions that correlate hotel performance recovery with GDP and unemployment recovery,
- Expectations that COVID-19 will remain a defining factor through first-quarter 2021, with particularly negative impacts to international and group demand;
- A four-stage lodging demand recovery based on gradual relaxation of social distancing measures that is expected to result in strengthening demand;
- Delayed under-construction properties, and fewer construction starts until the industry improves; and
- Average-daily-rate declines through Q1 2021 that will then gradually normalize.
Economic conditions (based on Oxford Economics’ June outlook)
Economic recovery depends on successful containment of the COVID-19 outbreak. Recent data shows economic activity has improved; however, a full recovery is expected to take time. It is anticipated that GDP and consumer spending will not regain Q4 2019 levels until Q4 2021, roughly two years after the initial shock.