US Hotels Report Reveals Landscape of Gradual Recovery

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Based in Portland, Oregon, Barclay Grayson guides acquisitions and development with the BPM Real Estate Group. Maintaining extensive industry knowledge, Barclay Grayson follows hospitality trends in Portland and beyond.

Released in July 2021, the CBRE US Hotels State of the Union report reveals a gradual rebound in hotel performance. While the occupancy recovery reached a plateau in early 2021, American hotels have benefitted from international travel restrictions, which routed travelers toward domestic destinations. At the same time, the demographics of visitors to the United States have shifted. As a percentage of travelers, Latin Americans have increased the most from the pre-pandemic status quo. The top five visitors in the first quarter of 2019, by country, were Canada, Mexico, Japan, UK, and China. By early 2020, that had changed to Mexico, Canada, Columbia, India, and the Dominican Republic.

Another finding in the report is that private, nonresidential fixed investment had reached record levels. With labor shortages and cost pressures an issue, limited-service hotels were able to generate operating profits in June 2021 more than 150 percent higher than 2 years earlier. The report predicts that, should consumer confidence continue to rebound, incremental leisure gains will result.

BBB Reports a Gradual Uptrend in Travel and Hospitality Sectors

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A longtime Portland, Oregon, executive, Barclay Grayson maintains oversight of development and acquisitions at BPM Real Estate Group. Among the projects Barclay Grayson is shepherding toward completion is Block 216, a downtown Portland luxury high-rise that will include office and residential space, as well as a five-star Ritz-Carlton hotel, and is aiming to open its doors in the post-pandemic era.

The hospitality industry is integrally tied to travel and business trends, and this was highlighted in the 2021 BBB Business Impact Report on travel, leisure, and hospitality. As reported by the Better Business Bureau, significant pent-up demand for domestic travel exists. An Expedia Group survey indicates that 44 percent of travelers plan to extend their vacations longer, or take more trips, than they did the previous year. Another survey by American Express found that 64 percent of respondents would forgo social media for a full month, for the opportunity to travel freely again, as they did before the pandemic.

Speaking with the BBB, the president of MMGY Travel Intelligence predicts a travel boom driven by those who earn $50,000 or more annually. Despite data indicating an increase in this demographics’ travel plans, overall spending on travel will still be down significantly from the pre-pandemic norm. A study by the American Hotel & Lodging Association presents a sobering view, with average hotel occupancy rates of around 50 percent predicted through the end of 2021. The gradual upward trend is positive news for long-term projects such as Block 216, which is expected to open its doors in 2023.

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