Hospitality Midyear Outlook
Hotels Making Great Strides Toward Recovery; Numerous Hurdles Remain on the Horizon
Hospitality demand improving. After being disproportionately impaired by the COVID-19 pandemic last year, hotels are welcoming back guests in greater numbers as postponed vacations are being taken. Air travel, in particular, has recovered significantly from the spring of 2020 when daily passenger volumes were only about 5 percent of normal levels. That metric has since increased fifteenfold as the rapid dissemination of vaccines has helped reduce infections, although about 25 percent fewer people are flying on any given day compared with 2019. This turnaround has nevertheless been able to lift hotel occupancy from a trough of 24.5 percent in April 2020 to back over 60 percent in June of this year. Demand for rooms from summer getaways is also aiding average daily rates, and the combination of higher occupancy and ADR has pushed the average U.S. RevPAR to within 20 percent of where it was two years prior.