PwC Forecasts RevPAR to Drop 53.1% in 2020

NATIONAL REPORT—PwC has updated its 2020 U.S. industry outlook: It anticipates RevPAR to decrease 53.1% from last year’s results, with occupancy declining 41.4% and ADR dropping 19.9%, as hotels try to capture market share following the impact of the COVID-19 pandemic.

“Certainly, we know the declines experienced over the last 90 days are historic and are resulting from the global pandemic,” said Scott Berman, principal and U.S. industry leader, hospitality & leisure, PwC. “As the industry begins its ‘relaunch,’ let’s understand the levers driving any restart are influenced by the contraction of the aviation sector, restrictions on business travel (transient and group) and the reopening of the borders for inbound international demand. Further, comprehensive efforts are well underway to reinstill confidence in all segments of demand that all components of travel are safe. The timing and success of these variables converging with macroeconomic data around unemployment will dictate the shape of the industry’s next six to 18 months.”

The PwC report, “Hospitality Directions U.S.,” forecasts that demand in the U.S. will drop 45.9% year over year (YOY) in 2020, but will rebound to an increase of 62.1% in 2021. Supply will decrease 7.6% YOY, but jump 8.1% in 2021.

Occupancy will increase from 38.7% in 2020 to 58.1% next year, while ADR will go from $105.02 this year to $116.18 in 2021. RevPAR is forecast to go from $40.66 to $67.44.

Forecasted RevPAR percentage changes by chain scale from the prior year include the following:

• Luxury: -65.5% in 2020 to 97% in 2021
• Upper-Upscale: -61.7% to 90.4%
• Upscale: -55.9% to 76.6%
• Upper-Midscale: -51.1% to 67.5%
• Midscale: -32.6% to 31.8%
• Economy: -28.2% to 30.8%
• Independent: -51.7 to 65.9%