Amid COVID-19, hotel and retail sales activity has dried up

COVID-19’s impact on transactions has varied based on property type.

Because of the pandemic’s immediate impact on travel and large social gatherings, hotels suffered the most swift and obvious disruption, and hotel transaction volume fell 95 percent year-over-year in May and was still down 66 percent from 2019’s volume through July, according to Real Capital Analytics. Between mid-February and the end of July, nearly 9 in 10 hotels reported being forced to lay off or furlough staff because of COVID-19, and U.S. hotels lost $46 billion in room revenue, according to numbers from the American Hotel & Lodging Association.

The virus has paused the market, and it will likely stay paused until the public is willing and able to travel and gather en masse again — an unknown that makes hotel deals very challenging to underwrite. Attempts to project forward have not been rosy. Hotel revenue will take until first quarter 2024 to rebound to 2019’s high, Adam Sacks, p