Leisure travel continues to dominate U.S. hotel demand, but PwC expects to see individual business travel and groups lead the demand recovery into 2022, provided Covid-19 infection rates drop, according to the company’s latest Hospitality Directions U.S. outlook, released this week. 

PwC projects that 2022 U.S. occupancy levels will reach 61.7 percent, up from the 57.1 percent forecast for 2021, and 4.3 percentage points below 2019’s level of 66 percent. 

Average daily rate, the surprise star of this recovery, continues to improve. ADR exceeded 2019 levels in each month of the third quarter of 2021, and PwC now expects the full-year 2021 metric to increase 19.6 percent year over year to $123.48, resulting in revenue per available room growth of 55.1 percent to $70.45, reaching about 82 percent of pre-pandemic levels. 

Occupancy was a bigger contributor to RevPAR recovery during the first half of the year, according to PwC, but ADR will become an increasingly important driver through at least the middle of next year. For 2022, ADR growth is forecast at 5.9 percent year over year, with RevPAR anticipated to be up 14.4 percent, and at 93 percent of 2019 levels. 

The company noted, however, that challenges to this outlook include the “effectiveness of a campaign to increase the number of people getting vaccinated, severity of virus mutations and corresponding vaccination efficacy, and Congress reaching a more permanent solution to the country’s debt ceiling in early December.”

Looking at chain scales, the 2021 forecast shows the luxury tier with the largest expected year-over-year increases in demand (74 percent) and RevPAR (82.3 percent). Luxury also is expected to have the biggest demand growth in 2022 at 38.8 percent, but the upper-upscale tier is anticipated to lead RevPAR growth with a 40.3 percent year-over-year jump, followed by luxury with 23.7 percent.

RELATED: PwC: Vaccination Deployment Driving Earlier U.S. Lodging Recovery

(this story/news/article has not been edited by PostX News staff and is published from a syndicated feed)

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