A Look at the Hotel Industry’s Recovery in 2022

The hotel industry has been slowly but steadily recovering in the U.S. and in many parts of the world since 2021; data shows this trend continuing into 2022.

New weekly data reports from STR are showing encouraging signs for the hotel industry this year and are providing key comparisons from pre-pandemic levels to measure where we are now in the hotel industry’s recovery. STR measures data from 70,000 properties across the globe to determine its data.

Globally, destinations continued to show a disproportionate recovery across 2021; while destinations in Europe had to go on lockdowns that understandably impacted the hotel industry negatively, others, like Miami and Dubai, reached the greatest levels of recovery in gross operating profit per available room (GOPPAR), a key metric in determining the health of the industry.

Miami exceeded its 2019 GOPPAR by 14 percent, while Dubai met 95 percent of its pre-pandemic GOPPAR. They are the two best recovering destinations in the world. The Middle East is considered the most recovered region for the industry, with total revenue per available room (RevPAR), another key metric, only roughly 14 percent lower than pre-pandemic levels, reaching the highest regional rate of recovery in the world.

By comparison, the United States only reached 52 percent of its 2019 GOPPAR last year. Canada’s RevPAR reached 54 percent of the 2019 comparison. These regions continue to show that there is still considerable recovery that needs to happen across the two countries, though some destinations, like Miami and Vancouver, are recovering at faster rates than their overall regions.

So how is 2022 stacking up in comparison to 2021’s recovery?

The two more recent data sets, ranging from the week of January 29 through the week of February 10, measure U.S. hotel performance to compare with the data from the same weeks in 2019. In that way, the reports can easily measure the industry’s rise towards regaining the momentum lost by the pandemic.

During the week of January 23-29, the average daily rate was only just 2 percent lower than 2019’s comparisons, at $125.06. Occupancy for the week reached nearly fifty percent, only 12.2 percent less than the same week in 2019. RevPAR was down 13.9 percent from 2019. These numbers had improved from the week prior.

The week of January 30 through February 5, U.S. hotel occupancy reached 50.4 percent for the first time this year, though 2019’s occupancy rate was higher, making it 15.8 percent lower than the pre-pandemic comparison. The average daily rate was only 1.2 percent lower than the pre-pandemic comparison, at $125.06. RevPAR was down 16.8 percent from the same week in 2019.

The growing weekly difference in RevPAR and occupancy shouldn’t be a cause for alarm; we know that some weeks are busier than others when it comes to traveling in general, like during the holidays, so it’s expected that the difference between current rates and their pre-pandemic comparisons are not always going to continue narrowing, but might in fact grow during some weeks and then narrow sharply again later in the year, during the busy spring break period and into summer.

Overall, the key takeaway from this data is that RevPAR and occupancy rates are at least remaining stable, with occupancy rates growing in much of the country.

A different report published by the American Hotel & Lodging Association predicts that it will take the U.S. hotel industry at least until 2025 to recover to pre-pandemic levels.

One reason for the long wait: the lack of business travelers, which were the source of more than 50 percent of the industry’s revenue back in 2019. The AHLA report expects it to constitute about 43 percent of all revenue in 2022, but also predicts business travel will remain at least 20 percent lower than the pre-pandemic average.

While it’s likely that the U.S. hotel industry will take its time recovering, these little signs at the beginning of the year point to at least a stabilization that is more welcome than the topsy-turvy rollercoaster we’ve seen in 2020 and even into part of 2021.