The implementation of three vaccines earlier than originally expected in the United States has accelerated PwC’s recovery timeline. Here is a look at its revised outlook.
In its November edition, PwC 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 U.S. 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. PwC currently expects annual occupancy for U.S. hotels this year to increase to 57.2% with an associated 8% increase in average daily room rates. This performance should result in a 40.1% increase in RevPAR over the previous 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 four months of this year bodes well towards a stronger summer for the US lodging industry,” added Warren Marr, U.S. Hospitality & Leisure managing director at PwC.
Further insight from PwC suggests the following:
- Despite increasing vaccinations (35% of the U.S. population was fully vaccinated as of May 11, 2021) and consumer optimism, lodging’s recovery is expected to remain uneven.
- In 2022, PwC forecasts the vast majority of temporarily-closed hotels will have reopened and demand growth will continue to improve as the economy strengthens. Occupancy and ADR will 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 U.S. overall rate increasing slightly to 6.1% (from 6% the prior month).