Hotel demand from both individual business travelers and groups is predicted to grow in 2022, if COVID-19 infection rates continue to drop, according to the latest analysis from PwC.
The report, entitled US Hospitality Directions: November 2021, confirmed a previous PwC forecast that the vast majority of hotels that had been temporarily closed due to the pandemic will have reopened in 2022.
However, with vaccination rates slowing and waning consumer optimism as the country heads into the final month of this year, the analysis finds that recovery in the lodging sector is expected to remain uneven.
Complicating the projections, the PwC report was released prior to the discovery of the COVID-19 omicron variant, which has prompted concerns that the impact of the pandemic may linger into 2022, further slowing business travel recovery.
Barring a return to lockdowns, the PwC projections show occupancy levels in the US reaching 61.7 percent in 2022. That’s an increase over the 57.1 percent forecast for 2021, but still 4.3 percentage points below 2019’s level of 66 percent.
The increased demand, according to the report, may lead to a significant rise in average daily room rates during the second and third quarters of 2022, which may exceed 2019 levels by the third quarter. The consultancy now expects ADR to increase 19.6 percent for the year. Luxury lodging is expected to have the biggest demand growth in 2022 at 38.8 percent.