Hotel Recovery Slower Than Initially Expected

The hotel market recovery could be slower than initially expected. New research from Fitch Ratings has found a lack of meaningful demand in the upper-tier hotel market, which could prove to slow the recovery in the US lodging market. As a result, the firm is decreasing its revPAR expectations for 2021 and maintaining its 2020 outlook. However, this adjusted outlook will not trigger downgrades due to cost controls, and the firm maintains that the market will recover in 2022 and 2023.

So far, hotel performance in 2020 has been on par with Fitch Ratings’ initial projections. As a result, the company maintains that 2020 revPAR will decline 45%, however in 2021, the firm now expects the market to rebound to 75% of 2019 numbers. This is a downgrade from Fitch Ratings’ initial expectation of an 80% rebound in 2021 of 2019 numbers. By 2022, Fitch expects 15% growth of revPAR and in 2023, revPAR growth of 8%.