Average RevPAR across the industry in the United States is down by about 84%
Occupancy recovery took four years following the 9/11 incident and about seven years post the 2008 Financial Crisis
STR and HVS combined research data forecasts RevPAR recovery (back to pre-COVID-19 levels of 2019) to occur in approximately half a decade
New Supply: Under construction projects may be delayed; new construction that hasn’t broken ground may face financing challenges; some new projects may become infeasible due to prolonged recovery periods, high construction costs, etc.
Note: There are 215,000 new hotel rooms under construction/broken ground in the United States
Hotel Values: In past cycles full-service hotels took about 7 years to get back to previous peak pricing and limited/midscale properties took about 4-5 years.
Low or negative EBITDA, mandated reserves at closing, all-cash transactions, seller financing, higher rates/spreads, and lower LTV requirements by lenders will put downward pressure on pricing.
Pricing Impacts due to COVID-19 in three different scenario projections (Best, Most Likely, and Worst)