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US Hospitality Directions: May 2021

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Accelerated vaccination deployment driving earlier recovery for the US lodging industry

The US lodging industry continues to regain strength with early signs of an accelerated recovery emerging since our last publication. In our November edition, we assumed the significance and frequency of recent COVID-19 case spikes would increase the length and severity of the pandemic. Beginning in mid December, the US passed a milestone when the FDA announced emergency use authorization for three COVID-19 vaccines which has greatly helped mitigate the spread of the virus. The implementation of three vaccines, earlier than previously expected, has positively impacted the recovery timeline. We currently expect annual occupancy for US hotels this year to increase to 57.2%, and average daily room rates to increase 8.0%, with resultant RevPAR up 40.1% from last year. RevPAR is expected to finish 2021 at approximately 74% of pre-pandemic levels.

"The speed at which the vaccine was deployed during the first 4 months of this year bodes well towards a stronger summer for the US lodging industry."

Warren Marr, US Hospitality & Leisure Managing Director

Trends and highlights

  • Despite increasing vaccinations (35% of the US population was fully vaccinated as of May 11, 2021) and consumer optimism, lodging’s recovery is expected to remain uneven.

  • In 2022, we forecast the vast majority of temporarily-closed hotels will have reopened and demand growth will continue to improve as the economy strengthens. Occupancy and ADR experience continued growth, resulting in a year-over-year RevPAR rebound of 15.2%, or approximately 85% of pre-pandemic levels.

  • As hotel owners began to gain confidence that the rollout of vaccines has started to tamp down the virus, April unemployment for the hotel sector improved to 13.8% (from 19.9% in March) compared to the US overall rate increasing slightly to 6.1% (from 6.0% the prior month).

RevPAR percent change, US and chain scales

RevPAR percent change, US and chain scales

Revised outlook anticipates

About Hospitality Directions

PwC Hospitality Directions US is a near-term outlook for the U.S. lodging sector, commonly used by industry decision-makers and stakeholders to better understand the impact of policy and other macro-environmental factors on the sector’s operating performance. Our outlook includes metrics for the overall sector as well as for the chain scales, and is used by our clients for

  • strategic planning and capital allocation purposes
  • demand and supply
  • occupancy
  • average daily rate
  • revenue per available room

Contact us

Scott Berman

Scott Berman

US Hospitality & Leisure Practice Leader, PwC US

Warren Marr

Warren Marr

US Hospitality & Leisure Managing Director, PwC US

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