As previously reported, the COVID-19 pandemic has affected hotels more than other asset classes eligible for CMBS conduit loans. In January 2021, the U.S. hotel industry reported all-time lows in occupancy and revenue per available room (RevPAR), according to yearend 2020 data from STR. In addition, year-over-year declines were the worst on record across the three key performance metrics:
- Occupancy: 44% (-33.3%),
- Average Daily Rate (ADR): $103.25 (-21.3%), and
- Revenue Per Available Room: $45.48 (-47.5%).
However, with the mass vaccination of U.S. citizens under way and with the expected surge in travel resulting from over a year of quarantines and travel bans, the hotel industry is expecting a surge in occupancy beginning this spring and accelerating into summer.
Hotel occupancy in tourist destinations, such as the Florida beaches, is surging. We recently surveyed our Florida coast hotel clients and found weekends are completely sold out for May and weekday occupancies are in the 70%-80% range. As a result, owners can push ADR to 2019 levels. “Many of our clients expect May and June RevPAR to exceed 2019 levels and are relieved to be able to re-stabilize their properties to pre-pandemic levels,” said Michael Sneden, Executive Vice President at ValueXpress.
As a result, ValueXpress is actively seeking CMBS conduit loans for re-stabilized hotels, targeting areas in which the post-pandemic results are taking hold. As your hotel performance begins to surge post-COVID-19, please contact Michael Sneden (email@example.com) or Gary Unkel (firstname.lastname@example.org) for a free, no-obligation loan quote.