NEW YORK – STR and Tourism Economics have updated the US hotel revenue recovery schedule per available room (RevPAR). On a nominal basis, the metric is now expected to top 2019 levels in 2022, according to the latest forecast just presented at NYU’s 44th Annual Hospitality Industry Investment Conference.
The main factor in the revised schedule was a +$11 adjustment to the 2022 average daily rate (ADR). Occupancy for the year is expected to be below the pre-pandemic comparable, while ADR and RevPAR are forecast at $14 and $6 more than in 2019, respectively. Previous versions of the forecast assumed a recovery in nominal RevPAR in 2023.
After adjusting for inflation, full recovery of ADR and RevPAR is not expected until 2024. Central business districts and top 25 markets are not expected to reach full recovery of RevPAR until 2024.
“Demand and occupancy have trended in line with our recent forecast, but pricing continues to beat expectations due to the influence of inflation as well as economic fundamentals supporting increased guest spending. “, said Amanda Hite, president of STR. “These latest forecasts recognize the risk of a mild recession without anticipation of massive layoffs and household finances in a good position to mitigate the effects of the recession. The traveling public is less affected by the recession and, at present, We expect demand to reach historic levels in 2023 as the recovery in business travel has accelerated and joined the incredible demand from the leisure sector.Of course, while leading indicators are expected to reach full recovery on nominal basis, we must recognize that profitability has only recently started to reach 2019 levels. Concerns persist over the cost of labor and services, and hotels in some major markets are still well behind schedule for the recovery Our revision to the forecast for the next quarter will reflect any visible impact from the Fed’s recent interest rate decisions.
“The outlook for hotel performance remains positive” said Aran Ryan, director of accommodation analytics at Tourism Economics. “Even as the economy faces headwinds from higher interest rates, volatile financial markets and inflation, housing demand and room rates are supported by strong household finances and the return business travel As the Federal Reserve rapidly tightens monetary policy to control inflation, there is a risk that financial conditions, which remain very accommodative, will begin to tighten in a disorderly fashion. said Adam Sacks, president of Tourism Economics. “This could risk an abrupt slowdown in the flow of credit and weigh on business and business confidence, further dampening economic growth. If a recession in the United States were to occur, it should be less severe than the Great Financial Crisis, due to the current reduction in financial imbalances. High savings reserves among consumers, especially those in high-income households, would also help to cushion the impact of a slowdown in sectors such as accommodation.
About the economics of tourism
Tourism Economics, an Oxford Economics company, focuses on the intersection of the economy and the travel industry, delivering actionable insights to our clients. We provide our global client base with direct access to the most comprehensive set of historical and forecast travel data available. And our team of expert economists develops custom economic impact studies, policy analyzes and forecasting models.
STR provides premium benchmarking data, analysis and market intelligence for the global hospitality industry. Founded in 1985, STR operates in 15 countries with North American headquarters in Hendersonville, Tennessee, international headquarters in London, and Asia-Pacific headquarters in Singapore. STR was acquired in October 2019 by CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of online commercial real estate information, analysis and marketplaces. For more information, please visit str.com and costargroup.com.
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