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Market Report

2021 U.S. Hospitality Investment Outlook

2021 Outlook

Commercial Real Estate 2021: Adapting to the New Normal;
Trends, Insights and Outlook for Hospitality Investors

Health crisis inhibited hotels more than most other property types last year. The travel restrictions and stay-at-home orders enacted in the first quarter of 2020 to slow the spread of COVID-19 had an immediate and severe impact on the hospitality sector. Occupancy levels quickly dropped from weekly averages above 60 percent to a low of 21 percent in mid-April, with revenue per available room (RevPAR) down over 80 percent year over year. Some properties temporarily closed, either due to local mandates or from minimal guest demand. As the first wave of infections crested and the weather improved, more individuals and families took vacations, lifting occupancy to over 50 percent by October. At year end that metric was back to 40 percent, however, as a resurgence of infections renewed down-ward pressure on occupancies, and daily rates. Full-service hotels situated in the urban cores of major metros were more affected than limited-service properties in smaller, scenic venues. Though challenged by the current health environment, the rollout of multiple vaccines paves a more positive road forward this year.
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