COVID Impact on Hotels Has Been Uneven

Jack Moran, President & CEO


The pandemic’s impact on the hotel market in California and Arizona has been severe but

uneven, according to a new report from CBRE. The report shows, for example, that occupancy fell to 37% in California and Arizona from March through August. While there were some signs of rebound in the spring, the market slowed again in the summer. The decrease in hotel activity has had a significant impact on the hotel investment market.


The CBRE reports highlights that luxury hotels have been the most dramatically impacted by the pandemic, particularly due to limited distance travel and a dramatic decline in group and corporate travel. On the other hand, drive-to destinations and lower-tier hotels have

outperformed the greater market. In this segment, (targeted by NLL) occupancy has only

declined 11% during the pandemic, according to research from CBRE. Luxury hotels have been disproportionally impacted by the onset of COVID-19 and the changes it caused in how and why guests travel. Mandates to slow the spread of the virus have limited or severely curtailed corporate travel, group meetings, social events, and international travel—all of which previously contributed to the success of luxury hotels in pre-pandemic times.


Many are wondering, however, if the hotel market will be permanently changed by the

pandemic, but in a recent GlobeStreet.com article, Brandon Feighner of CBRE Hotels Advisory says that it is too early to tell. “It is too early to tell if the changes experienced by the hotel industry over the past eight months will lead to permanent declines in hotel activity given the high level of uncertainly governing the decision we all face on a daily basis,” says Feighner. “What I can say is that we have been in the forecasting business since the early 1930’s, and the hotel industry has always eventually recovered to a level that was greater than prior to the downturn.”


Read the full article HERE

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