Hotel Recovery Continues in Q2

  • The hotel sector posted record performance gains in Q2 compared with a year ago when it was essentially shut down by COVID-19 restrictions. Demand increased by 100.8%, occupancy gained 97.5%, revenue per available room (RevPAR) jumped 180.5% and the average daily rate (ADR) grew by 42%.
  • Despite this welcome year-over-year improvement, the hotel sector’s main performance metrics remained below pre-pandemic levels. Compared with Q2 2019, demand was 13.9% less, occupancy was 16.7% lower, RevPAR was down by 25.3% and ADR down by 10.4% due to continued weakness in business travel, luxury property closures and general pricing pressures.
  • Approximately 6.6% of luxury hotel properties remained closed at the end of Q2, down from 15.4% in Q1 and from a peak closure rate of 54% in April 2020. As additional higher-priced hotels reopen, overall ADR growth should accelerate. The closure rate of all hotel properties stood at just 3.0% at the end of Q2 2021, down from 4.4% at the end of Q1 2021.
  • The top 10 performing markets in Q2 were all Southern resort destinations with record-high RevPAR. The weakest 10 markets were all Northern urban destinations, where average RevPAR was still down by more than 60% relative to 2019.