Citing “disabled plans” for group and business travel this fall due to the spread of the Covid-19 Delta variant, CBRE Hotels Research has softened its forecast for the performance of the US accommodation market for the fourth quarter of 2021 and through 2022, announced the company.
“The Delta variant and the increasing number of Covid infections caused delays in the plans to return to office for many companies and coincided with the start of the 2022 travel budget season,” said Rachael Rothman, head of hotel research and data analysis at CBRE in a opinion. “Unfortunately, for business-oriented hotels, the business travel recovery expected in September 2021 is being delayed and is likely to impact business travel budgets by 2022.”
CBRE now predicts that US hotels will have an annual occupancy rate of 54 percent at an average daily rate of $ 112.85 by the end of 2021. Revenue per available room for the full year 2021 is projected to be $ 60.91, 42 percent higher than the RevPAR recorded in 2020, but still about 29 percent lower than the 2019 reported value.
Those raw forecast numbers are actually higher than the ones CBRE released in its previous July 2021 forecast, but that’s because the actual readings for the three months of the summer recreational season were “so much stronger than expected” that they are “the reduction “in the remaining months, Rothman said in an email message.
For 2022, CBRE is forecasting an increase in occupancy of 8 percent compared to the previous year, an increase in ADR of 7.1 percent and an increase in RevPAR of 15.6 percent.
On the basis of anecdotal discussions, CBRE found that the delta variant “will have a negative impact on companies’ travel budgets in 2022”. Demand for meeting-related travel may lag behind in previous years, but it could also “bring short-term benefits to markets with lower operating costs, warmer weather and less restrictive health regulations,” the company said.
“In general, Sun Belt cities and car travel destinations are expected to perform best, while group-focused hotels, northern markets and global gateway cities that rely on inbound international travel are likely to underperform,” said CBRE Hotels Research senior hotel economist Bram Gallagher in a statement. “The pace of recovery in business and group demand is paramount for most hoteliers.”
CBRE: Rate leads US hotel RevPAR recovery as occupancy lags