Hotel occupancy this year is forecast to average 44.2 percent in the Seattle MSA, a region covering Pierce, King, and Snohomish counties, according to a new report from CBRE Hotels Research. That occupancy would be up from 34.6 percent in 2020 but still well below the market’s pre-pandemic occupancy of 74 percent in 2019.
Nonetheless, it marks the beginning of a recovery in the lodging industry, CBRE said in a news release announcing its forecast. The forecast shows Seattle MSA occupancy rising to almost 60 percent in 2022.
“The quicker-than-anticipated national rollout of COVID-19 vaccines, coupled with the December COVID Relief Bill have, improved the outlook for the U.S. hotels market,” Julie Purnell, executive vice president of CBRE Hotels Advisory for the West Division, said in the release. “We expect hotels and drive-to destination resort areas catering to leisure travelers to continue to see the fastest gains in occupancy. We anticipate business travel to pick up in the latter half of the year, benefitting urban and suburban upper-priced properties.”
According to the February 2021 edition of Hotel Horizons, CBRE Hotels Research is forecasting an average U.S. occupancy of 43 percent in the first half of 2021 and 55.1 percent in the second half.
“Based on our forecasts, the worst of the top-line declines are now behind us,” said Rachael Rothman, head of Hotels Research and Data Analytics for CBRE. “We are beginning to see green shoots of a recovery in air travel data, booking patterns, and revenue per available room (RevPAR).”
The Seattle MSA’s average daily room rate (ADR) is expected to decline 9.6 percent this year to $95.23. However, RevPAR is expected to climb 15.6 percent to $42.11 by the end of the year, CBRE said. The region’s hotel market is projected to reach full recovery in 2024, with forecast ADR and RevPAR both surpassing 2019 levels, it said.
A reduction in the traditional lodging supply is one factor supporting enhanced lodging performance in the second half of 2021 and beyond, CBRE’s release said. Permanent closures and fewer projects starting construction resulted in CBRE’s national hotel supply forecast for 2021 rising just 0.9 percent for the year.
For the Seattle MSA, hotel supply is forecast to grow 1.3 percent in 2021, below the long-run average of 1.9 percent, CBRE said, estimating national supply growth will remain below 1 percent through 2023. Among new hotels opening in the Seattle MSA this year: The Lodge at St. Edward State Park in Kenmore, which opens Friday.
Seattle MSA forecasts:
2021: Occupancy, 44.2 percent; ADR, $95.23; RevPAR, $42.11.
2022: Occupancy, 59.9 percent; ADR, $124.75; RevPAR, $74.70.
2023: Occupancy, 71.2 percent; ADR, $148.94; RevPAR, $106.09.
2024: Occupancy, 73.4 percent; ADR, $165.03; RevPAR, $121.06.
2025: Occupancy, 73 percent; ADR, $174.13; RevPAR, $127.05.
(Source: CBRE Hotels Research Hotel Horizons, February 2021, Kalibri Labs)