March 8, 2021 | By Debo Ayeni — After the Great Financial Crisis of 2008 to 2009, the U.S. hotel industry experienced ten consecutive years of growth. According to the leading hospitality research firm STR, in 2019, this growth culminated with demand for rooms reaching a record 1.282 million room nights, an average daily rate of $131, and revenue per available room of $87. The average daily rate and revenue per available room figures were the highest ever benchmarked by STR and reflected the industry’s strong recovery after the Great Financial Crisis.
At the beginning of 2020, industry projections were positive despite demand growth slowing in 2019, the potential for higher labor costs because of a tightening labor market, and increased competition from Airbnb and other home-rental companies. However, the industry’s outlook changed suddenly in March when COVID-19 emerged. The COVID-19 global pandemic immediately disrupted the hotel industry and dramatically altered its landscape. This report assesses the state of the U.S. hotel industry by analyzing COVID-19’s impact on industry fundamentals, the financial duress it has placed on hotel owners and operators, the potential for COVID-19 to cause lasting changes to hotel properties, and the industry’s prospects for a timely recovery.