Strong summer travel season helps hotels put pandemic in rear-view mirror

Travel demand is improving, although inflation presents headwinds, reported Marcus & Millichap.

Demand for hotel rooms takes on more familiar patterns this year. After persevering through incredible challenges in 2020 and 2021, the hospitality sector in the first half of 2022 more closely resembles that of the pre-pandemic period. Room demand through the first six months of the year has been in line with bookings from the same windows in 2017 and 2018, only trailing the record 2019 span by about 3 percent. The greatest beneficiary of this returning demand has been room rates. The average daily rate for the 12-month period ending in June was $140.59, up from the previous high set in February 2020 by about 7 percent. Occupancy, meanwhile, trailed the previous benchmark by 450 basis points at midyear, but continues to make steady improvement. Climbing occupancy, paired with record ADR, will lift the annual average revenue per available room above the pre-pandemic peak by the