There is Light at the End of the Tunnel for the U.S. Hotels Sector, According to Integra's 2021 Hospitality Viewpoint Report
Annual Report Reveals Latest Trends and Data Across National and Local Hospitality Markets
It's no secret that the U.S. lodging sector has been hit hard by the pandemic. However, there is light at the end of the tunnel, according to Integra Realty Resources' (IRR) just released Hospitality Viewpoint 2021 report.
"Demand is set to increase by the second quarter, beginning with leisure and extending to commercial and group by the fourth quarter 2021," according to National Practice Leader of Integra Hotels, IRR's specialty hospitality group, Jeff A. Greenwald, MAI, SRA, AI-GRS, ASA, IFAS, FRICS. "However, Integra does not anticipate a return to pre-pandemic metrics until early 2024."
IRR's Hospitality Viewpoint 2021 report, which can be downloaded for free from IRR's website at www.irr.com/hotels, provides a detailed overview of local and national commercial real estate market across the hospitality sector. Below are a few highlights.
· The lodging market has been devastated by the pandemic. IRR does not anticipate a return to pre-pandemic metrics until early 2024 due to decreased demand.
· The top markets for occupancy include Phoenix, Atlanta, Norfolk/VA Beach, Los Angeles/Long Beach, San Diego, and Tampa/St. Petersburg. The hardest hit states were Hawaii (-65.2 percent), followed by Illinois, Massachusetts, New York (-49.1 percent), California, and Florida.
· The Top 25 Markets are showing an overall occupancy rate of only 39.5 percent (-46.6 percent), with an ADR of $100.90 (-26.2 percent) and RevPar of $40.01 (-60.6 percent).
· Operators are placing emphasis on sanitation/cleaning protocols, increased customer service, and digital check-ins. Due to limited capacities, daily operations are changing, and operators are looking for alternative sources of guests, as they re-purpose under-utilized spaces.
· Sellers are finding new, non-traditional buyer pools, as cities and counties are purchasing underperforming hotels for transitional and low-income housing requirements.
· As the U.S. exits the current pandemic, major mergers and acquisitions activity is anticipated among the ‘Big 6' hotel companies.
Over the past 36 months, Integra Hotels has completed 2,500 hospitality assignments totaling more than $25 billion in asset value, ranging from small bed and breakfasts to major luxury hotel brand portfolios. For more information about this year's report, or to access additional IRR research from Integra Hotels specialty practice group, please visit www.irr.com/hotels