U.S. Hotel Demand and Rate Could Near Full Recovery in 2022

STR and Tourism Economics have shaved a year off the rebound timeline with their new forecast update.

STR TE Forecast 2022 Update Recovery

Hotel industry recovery in the U.S. could come far earlier than previously anticipated, according to the latest forecast update from lodging-data providers STR and Tourism Economics. The new projection calls for near full recovery of demand and average daily rate in 2022, with revenue per available room anticipated to be fully recovered in 2023. The update was released today at the 43rd Annual NYU International Hospitality Industry Investment Conference.

"We have essentially moved up the top-line recovery timeline by one year, with the caveat that improved RevPAR projections are largely due to ADR," said Amanda Hite, STR’s president. "ADR has risen more rapidly than we expected."

STR Update Forecast Recovery Compared to 2019
Metrics as a percentage of 2019 levels. Source: STR

That was driven in some cases by strong demand mixed with reduced capacity, Hite explained, while inflation drove the rise in other cases. With the exception of the first quarter of 2021, she added, "demand has mostly adhered to the forecast, with strong leisure travel, slowly improving group business and an expected progressive increase in international arrivals next year.

"Of course, these are all national projections of top-line performance," Hite said. "Recovery is not playing out the same across the marketplace." In many areas, the cost of labor has likewise become a contributing factor in driving up ADR, she said, adding "Recovery is progressing at a solid rate no doubt, but there will still be plenty of ups and downs along the way."

The long-awaited return of meetings is on track to occur next year, said Tourism Economics director Aran Ryan. "Travel activity entered the fall with strong momentum," he noted. "With improving public-health conditions and sustained economic recovery, additional business and group travelers are expected to join leisure travelers, supporting further gains next year."

STR Update Forecast 2021-22
Updated forecast for 2021-2022. Source: STR