Quick Takeaways

  • Hotel demand plummeted by 57% in the beginning of the COVID-19 pandemic.
  • Leisure travel began to make up for the earliest pandemic vacancies as early as late summer 2020, and the “overall revenue per available room” had reached 94% of its 2019 value by July 2021.
  • However, business and group travel have still not caught up, causing urban cores to fall behind, with some down as much as 67% compared to 2019.

Source: Hotels – U.S. Real Estate Market Outlook 2022 (CBRE, May 17, 2022)

The hotel and motel investment world has been a rollercoaster since March of 2020, when COVID-19 decimated the travel world. However, investors are back and all-in after a two year slump. Like residential real estate, the prices for hotels are currently surging.

During the height of the COVID-19 pandemic, hotel management was primarily concerned about keeping the doors open and figuring out the best ways to protect staff and guests from illness. However, as travelers have flocked back to hotels, management has some room to focus on more than safety – technology and amenities in this changed world of travel are at the forefront.

Hotel and motel safety is priceless, and though physical safety is perhaps more important, data security is a close second. Safety from the COVID-19 pandemic is still a huge part of the safe hotel experience, but data breaches and fraud have certainly not slowed down because of the pandemic.

The hotel stay is back (for the most part) and with it comes hotel sales. An extremely unique real estate market has created highly priced hotels, similar to the residential sector. Standard valuation and appraisal standards hold true, but the post-pandemic world is full of surprises! 

See References for more information.