The factors driving latest US hotel industry forecast

Analysts from STR and Tourism Economics offer insights into the firms’ updated forecast, which predicts a roughly two-year recovery for the U.S. hotel industry.

Published by: Emmy Hise and Aran Ryan/Hotel News Now
Published date: June 2020

BROOMFIELD, Colorado, and PHILADELPHIA—Forecasting U.S. hotel performance is a moving target due to unknown variables such as government regulations and containment measures related to COVID-19.

As the impact from the pandemic continues to evolve, Tourism Economics and STR released an updated total U.S. hotel-industry forecast on 26 June.

The primary drivers are:

  • Economic conditions that correlate hotel performance recovery with GDP and unemployment recovery,
  • Expectations that COVID-19 will remain a defining factor through first-quarter 2021, with particularly negative impacts to international and group demand;
  • A four-stage lodging demand recovery based on gradual relaxation of social distancing measures that is expected to result in strengthening demand;
  • Delayed under-construction properties, and fewer construction starts until the industry improves; and
  • Average-daily-rate declines through Q1 2021 that will then gradually normalize.

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