CBRE Downgrades Hotel Industry Forecast
Recovery for the hotel industry has stalled as business travel continues to be anemic amid the coronavirus pandemic, according to CBRE Hotels Research.
CBRE adjusted its forecast for the hotel industry to reflect relatively low occupancies and revenue per available room for the rest of this year, though 2021 will turn out to be much better for the industry than 2020.
The real estate giant now predicts that U.S. hotels will achieve a 2021 average occupancy of 54% along with an average daily rate of $112.85. Both of those are higher than last year but lower than 2019. The resulting RevPAR of $60.91 will likewise be 41.7% greater than RevPAR in 2020 but still 29.3% less than 2019.
As for 2022, CBRE reports that anecdotal evidence suggests that the delta variant is having a negative impact on 2022 corporate travel budgets. Still, the company predicts a U.S. hotel occupancy gain of 8% in 2022 compared with this year, plus a 7.1% boost to average daily rates and a RevPAR increase of 15.6% year-over-year.
Convention travel will resume first in places with low operating costs and relatively fewer health restrictions, CBRE predicts. These include Dallas, Las Vegas, New Orleans, Orlando and San Antonio.
Business travel didn't recover this year as much as leisure travel, which — except for the Thanksgiving and Christmas holidays — tapers off in the U.S. during the colder months.
A September poll of more than 600 companies by the Global Business Travel Association found that while business people want to travel like they used to, they aren't doing so, with the delta variant as the main culprit. Some 77% of respondents have canceled most or all international business trips as of September, while 38% have canceled all or most domestic business trips.
Among those respondent companies that said they never or rarely allow nonessential business travel, 8 in 10 also said they are delaying the resumption of nonessential domestic and international business travel due to the delta or other variants.
“It’s not a surprise that for a second consecutive month, travel industry buyers and suppliers continue to report ongoing caution around variants and travel restrictions as key factors impacting what would otherwise be a more accelerated return to business travel," GBTA CEO Suzanne Neufang said in a statement.