Industry Update
External Article24 December 2020

5 Predictions For 2021

From the rebound of key hotel performance metrics to the potential return of group demand and international travel, the U.S. hotel industry could take its first steps on a long road to recovery in 2021.

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NASHVILLE, Tennessee - 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 the catastrophic U.S. hotel performance results in April, when revenue per available room declined by 80%, monthly results have gotten if not better, then at least less bad. For the full-year 2020, the STR forecast stands at just barely above a 50% decline. These are numbers and experiences you tell your grandkids about.

The great news of at least three vaccines that were developed in record time—in warp speed, to coin a phrase—has the collective global hotel industry breathing a sigh of relief. But if we learned one thing from the summer of 2020, it is that the American consumers were still called to travel, vaccine or not, travel restrictions in place or not, CDC warnings or not. And that trend helped with results in July and August, but likely will also lead to continued increases in COVID-19 cases.

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).

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