CBRE released an updated 2020 forecast Tuesday in light of the COVID-19 pandemic, projecting a 37 percent decline in U.S. revenue per available room for the year. Before COVID-19, CBRE had predicted a 0.1 percent decline in RevPAR in 2020.
The organization projected RevPAR will decline more than 60 percent in Q2. CBRE expects activity to stabilize as early as Q3 and a recovery to be underway by Q4. The expected declines in RevPAR will be worse than those experienced in 2001 and 2009 combined, said CBRE.
CBRE predicted RevPAR will have almost recovered to 2019 levels by 2022. By that point, it said, the industry will have lost nearly $100 billion in rooms revenue alone based on pre-COVID-19 forecasts.
The organization projected demand and average daily rate will decline by 28 percent and 10.8 percent, respectively, in 2020.
CBRE lowered its forecast for gross domestic growth from 1.9 percent to 0.4 percent. With governments around the world implementing monetary and fiscal stimulus packages, it expects there will be a substantial rebound in economic activity in 2021.
Comparing occupancy levels in Italy and the United States starting just before they hit their 100th confirmed case to China, CBRE said the countries appear to be following a similar pattern. China, it noted, is about seven weeks ahead of the United States and already starting to see gains in occupancy. The U.S., about two weeks behind Italy, is probably a month or more from the bottom, said CBRE.
The organization said it does not expect occupancy levels to get as low in the U.S. as in China due to an unproven ability to enforce travel restrictions and inconsistent policies at the state and local levels. Additionally, it noted a significant base of essential hotel demand from short- and long-term housing; construction, airline and contract workers; stays related to the health-care industry; students; and people self-quarantining away from family.