According to its current industry outlook, Lodging Analytics Research & Consulting (LARC) expects U.S. RevPAR to increase by 27.4% to $91.53 this year, resulting in an annual RevPAR 6% above 2019 levels. The recovery is driven by continued strength in ADR.
The company anticipates ADR to rise by 19.7% this year to $149.23, or 14% above 2019 levels. With occupancy expected to increase 6.4% in 2022 to 61.3%, LARC has a more conservative view of the demand recovery. LARC expects occupancy to peak this cycle in 2024 at 64.0%, well below 2019 levels of 66.1%.
For this year, LARC also anticipates U.S. hotel EBITDA to grow by nearly 65% and hotel values to increase 10%. It predicts values will recover to 2019 levels this year and hotel EBITDA by 2023.
LARC’s U.S. RevPAR model has an R-squared of 99.5%, with a standard error of 4.9%, back-tested to 2000. LARC’s U.S. cap rate model has an R-squared of 98.4% with a standard error of 23 bps, back-tested to 2005.
Market outlooks
Below is a list of the best and worst-performing markets based on LARC forecasts.
2022 (relative to 2019)
Top markets for RevPAR growth:
Mobile, AL; Palm Beach, FL; Charleston, SC; Tampa, FL; and Norfolk, VA
Bottom markets for RevPAR growth:
San Jose, CA; San Francisco; Washington, DC; Minneapolis; and Portland, OR
2022 (year-over-year)
Top markets for RevPAR growth:
San Jose, CA; San Francisco; Minneapolis; Washington, DC; and Boston
Bottom markets for RevPAR growth:
Tampa, FL; Norfolk, VA; Memphis, TN; Palm Beach, FL; and Miami
2019 – 2026 outlook
Top markets for RevPAR growth:
Las Vegas; Charleston, SC; Palm Beach, FL; Memphis, TN; and Mobile, AL
Bottom markets for RevPAR growth:
San Francisco; Boston; Kansas City, MO; Portland; and Louisville
Top markets for value change:
Tampa, FL; Los Angeles; Houston; Nashville; and Phoenix
Bottom Markets for Value Change:
San Francisco, Boston, San Antonio, New York and Portland
