Hotel Industry Predicted to Improve Halfway Through Next 2021

Recent increase in COVID-19 numbers shows bleak expectations for new year. But effective vaccines bring hope around the corner. Experts predict the hotel industry won't bounce back to normal for another two years. But halfway through next year, expect to see an uptick in occupancy rates. A recent report from CBRE Hotels Research shows an increase in occupancy rates of nearly 12 percentage points from the first quarter to the second, which is the highest it's been since the coronavirus outbreak. "The increased spread of the COVID-19 virus and reinstatement of government restrictions, combined with the lack of an economic stimulus package, has lowered our outlook for the performance of U.S. hotels during the remainder of 2020 and through next year's first half," said Bram Gallagher Ph.D., Senior Hotel Economist with CBRE Hotels Research, in a press release. "The confidence provided by an effective vaccine will serve to sustain the relatively strong leisure travel patterns observed during the summer of 2020, plus initiate a significant return of corporate travelers during the second half of 2021." Just because there's an improvement doesn't mean we're out of the woods yet. Is there a light at the end of the tunnel? As more folks across the country receive shots in the arm, there seems light at the end of the long COVID tunnel. But even as travel patterns level out, the financial ramifications may linger much longer. In November 2020, Management consulting firm, McKinsey & Company, released research showing the hotel industry may not recover to pre-COVID levels until 2023. One thing the research suggests is economy-level lodging will likely bounce back the quickest. For example: Back in May, the occupancy level for luxury hotels was around 15 percent. Economy hotels? Forty percent. At that rate, this may be good news for those owners. But for luxury hotels projections aren't bright. What will change after COVID-19? According to McKinsey & Company, 40 percent of investors have a pessimistic view of the luxury hotel industry. Hoteliers have gutted their staff to skeleton levels. It's a bleak moment in history that many may never recover from. In the meantime, Travel and Leisure reports: We'll likely continue to see an increase in cleaning and safety guidelines. Following recommendations from the Centers for Disease Control and public safety officials is the best bet to make guests feel safe. The more above and beyond a staff can go, the more likely guests will feel comfortable. Marketing these extra steps is one way to appeal to the general public. A survey from Amadeus showed close to 4 in 10 Hospitality Sales and Marketing Association International feel "health and safety will be the most significant trend we’ll see during crisis recovery." And another 47 percent said the "most impactful long-term trend." If there's one thing to focus on more than ever: Health and safety is the new hospitality.

Hotel Industry Predicted to Improve Halfway Through Next 2021

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