PwC: Accelerated vaccination deployment driving earlier recovery for industry

The U.S. lodging industry continues to regain strength with early signs of an accelerated recovery emerging, according to PwC’s Hospitality Directions US: May 2021 report. In the November edition of the report, the company assumed the significance and frequency of recent COVID-19 case spikes would increase the length and severity of the pandemic. Beginning in mid-December, the U.S. passed a milestone when the FDA announced emergency use authorization for three COVID-19 vaccines which has greatly helped mitigate the spread of the virus.

The implementation of three vaccines, earlier than previously expected, has positively impacted the recovery timeline, according to PwC, which currently expects annual occupancy for U.S. hotels this year to increase to 57.2%, and ADR to increase 8.0%, with resultant RevPAR up 40.1% from last year. RevPAR is expected to finish 2021 at approximately 74% of pre-pandemic levels.

Trends and highlights:

  • Despite increasing vaccinations (35% of the U.S. population was fully vaccinated as of May 11) and consumer optimism, lodging’s recovery is expected to remain uneven.
  • In 2022, PwC forecasts the vast majority of temporarily-closed hotels will have reopened and demand growth will continue to improve as the economy strengthens. Both occupancy and ADR will experience continued growth, resulting in a year-over-year RevPAR rebound of 15.2%, or approximately 85% of pre-pandemic levels.
  • As hotel owners began to gain confidence that the rollout of vaccines has started to tamp down the virus, April unemployment for the hotel sector improved to 13.8% (from 19.9% in March) compared to the U.S. overall rate increasing slightly to 6.1% (from 6% the prior month).