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[Travel News]: STR: How will U.S. hotel industry be like in the new year?

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The following is the [Travel News]: STR: How will U.S. hotel industry be like in the new year? from [Hotel News Now] recommended by TheTourAttraction.com:

STR projects ADR growth of just over 5% in 2021 and likely the same or a more subdued pace going forward.

After the events of 2020, quite a bit of the near-term hotel industry outlook is decidedly better, which is not hard to imagine. But just like with all recoveries, the outlook varies by class, location and customer type.

As 2021 begins, here are some of the forces that will govern the U.S. hotel industry in the coming year.

1. RevPAR growth will be the strongest ever recorded

After a stronger-than-expected summer season, what has been missing in the weeks after Labor Day was any real sign of corporate group or transient demand returning. The coming vaccines make that demand rebound much more likely a little later in 2021. So, STR predicts that room demand will be a quarter higher than it was in 2020 and that RevPAR will grow by over 30%, the single strongest RevPAR growth year ever recorded by STR (the prior peak was +8.6% in 2005).

2. ADR growth will be anemic—or will it?

As we have previously reported, average daily rate recoveries are never “V-shaped” and so the sharp ADR deterioration of around 21% this year will likely not be made up quickly. Indeed, STR projects ADR growth of just over 5% in 2021 and likely the same or a more subdued pace going forward.

What this implies, then, is that the absolute level of 2019 ADR will not be reached for a while. In fact, our five-year projection horizon does not actually show a return to the 2019 levels, but if you follow the projected path, a recovery in 2025 seems likely—we just don’t project that far out right now.

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