Vaccinations, stimulus looked to spur hotel comeback, CBRE report indicates

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The continued rollout of COVID-19 vaccinations and additional stimulus funds have strengthened the foundation for the recovery of the U.S. lodging industry.  According to the February 2021 edition of Hotel Horizons, CBRE Hotels Research is forecasting an average national occupancy level of 43% during the first half of 2021, accelerating to 55.1% in the second half of the year.

Kannan Sankaran, a senior vice president at CBRE Hotels Advisory’s Northeast Division, said he expects the greater Baltimore area will see an increase in hotel demand of 23% for 2021 and a forecast growth of 31.4% for 2022. Visit Baltimore’s campaign efforts to promote the city as a destination for both groups and tourists along with the city’s medical industry presence will serve as catalysts to fuel the tourism and hotel market in Baltimore, he added, and the city is expected to return to pre-pandemic levels of hotel performance by 2024.

The report also states that Greater Baltimore’s overall hotel occupancy in 2021 is forecast to be at 47.7%, increasing to 61.3% in 2022. Baltimore’s ADR (average daily rate) is forecast for 2021 at $77.01, increasing by 20.7% in 2022 to $92.98. The market’s RevPAR (revenue per available room) is projected to be $36.73 in 2021, increasing by 55.2% to $57.01 in 2022.

CBRE advises hotel owners and operators to evaluate performance by location, property type and chain scale, and 2021 is no exception.

RevPAR gains will vary widely by market as well.  Hotels in markets such as Minneapolis, Washington, Boston, Chicago and Philadelphia are expected to enjoy RevPAR gains of more than 50.0% during the year. However, results still will fall meaningfully short of prior peaks. By year end, smaller cities such as San Bernardino, California; Dayton, Ohio; Oklahoma City, Oklahoma; Virginia Beach, Virginia; and Savannah, Georgia will be closer to returning to 2019 RevPAR levels than other markets.